ORAL ANSWERS TO QUESTIONS

HEALTH

The Secretary of State was asked—

Hospital Volunteers

Mary Macleod: What his policy is on the use of volunteers in hospitals.

Paul Burstow: The coalition Government recognise the tremendous contribution that volunteers play in enhancing quality and experience in health and social care, including within hospitals. We are working with partners, including the National Association of Voluntary Service Managers, to strengthen this role during service reform.

Mary Macleod: Mr Speaker, may I wish you and the House a very happy and healthy new year?
	I thank the Minister for his response. I recently attended the local volunteering awards in the West Middlesex hospital in my constituency. Almost 400 volunteers do great work for patients and the hospital. What financial assistance is available to hospitals to support these volunteering projects?

Paul Burstow: I very much agree with the hon. Lady about the need for NHS trusts to consider their stance on volunteering. Indeed, I suspect Members of all parties have visited hospitals and worked with friends organisations over the Christmas period and have seen the good work that volunteers do in our hospitals. Our aim is to make sure that NHS trusts and commissioners of health and social care have the tools and information they need to make good judgments about investing in volunteering. That was the purpose of the volunteering strategy that we published last year.

Graeme Morrice: We all recognise the huge contribution that volunteers make to the NHS, so will the Minister take this opportunity to recognise the contribution of Clive Peedell, the co-chair of the NHS Consultants Association, who is taking part in Bevan’s run today, highlighting concerns among the medical profession about the impact of the dreadful Health and Social Care Bill?

Paul Burstow: I would certainly wish that gentleman well with his run. I am sure that the contribution he makes through that charitable act is one that will stand us all in good stead in due course.

Bob Russell: Is there a conflict between the big society, volunteers and localism if major retail stores are brought into hospitals to the detriment of friends organisations?

Paul Burstow: My hon. Friend raises an important point. I am aware that it is a matter of concern that over a number of years some hospitals have chosen not to use the WRVS or friends organisations’ services. These decisions have to be made by local NHS trust boards, but the purpose of the strategy we published last year is very much to make sure that when the boards make
	these decisions they are focused on the benefits—the benefits of volunteering for the volunteer, the organisation and the patients.

Luciana Berger: What is the Minister’s assessment of the number of unpaid interns working in the NHS?

Paul Burstow: As far as I am aware, no assessment has been made to analyse the number of unpaid interns. What is very clear, however, is that when NHS organisations are using people to provide services as volunteers, that is clearly separate from what would be regarded as paid employment. That is clear in the strategy we set out last year and clear in the advice and guidance provided by the Cabinet Office as well.

Access to Drugs

Graham Evans: What recent representations he has received on access by NHS patients to drugs invented and developed in UK laboratories; and if he will make a statement.

Andrew Lansley: Representations received have strongly supported the Government’s “Strategy for UK Life Sciences”, which was published on 5 September. Speeding up clinical trials approval, enabling the unique NHS clinical databanks to support research, the early adoption of new medicines and other initiatives will bring NHS patients the fullest benefit from innovation and will promote growth in UK biosciences.

Graham Evans: What steps are being taken towards closer collaboration between the NHS, industry and our world-class universities to drive improvement and innovation in the NHS for the benefit of current and future NHS patients?

Andrew Lansley: I am grateful to my hon. Friend. He rightly highlights an area where we are clear that innovation can be considerably supported, and not only by the academic health science centres, which were established under the last Government. As the life sciences strategy set out in early September made clear, we want to create academic health science networks across the NHS so that higher education, industry and the NHS can work together to bring about the greatest possible innovation to the benefit of patients.

Kevin Barron: The current pharmaceutical price regulation scheme is able to recognise the fact that pharmaceutical companies based here and developing drugs here should be paid a little bit more for their drugs by the NHS on the basis of their worth for the general economy. Will the Secretary of State tell us whether his proposals for value-based prices will affect that?

Andrew Lansley: The right hon. Gentleman will be aware that the existing PPRS does not in any sense directly fund innovation in the United Kingdom. Although it takes account of expenditure on innovation, it cannot identify that expenditure in the United Kingdom as a beneficiary through pharmaceutical pricing. As the right hon. Gentleman knows, we are continuing to discuss
	with the industry the shape of value-based pricing from January 2014, the purpose being to ensure that we fund the value associated with new medicines: the therapeutic value to patients, the innovative value—which will highlight the UK as a base for research and development—and the societal value.

Paediatric Cardiac Services

Jason McCartney: If he will take steps to ensure that the safe and sustainable review of paediatric cardiac services is fully inclusive.

Simon Burns: The review of children’s congenital heart services is a clinically led NHS review, independent of Government. In conducting it, the Joint Committee of Primary Care Trusts has aimed to be as inclusive as possible in relation to all issues.

Jason McCartney: The Minister will be aware that the review has been called into question because the consultation has not encompassed other medical conditions such as respiratory problems. Will he intervene so that a consensus approach can now be taken?

Simon Burns: As I have said, the review is clinically led and independent of Government, and I am afraid that it would not be appropriate for me, or my colleagues, to intervene. Moreover, the review is the subject of legal proceedings. It will be for the Joint Committee of Primary Care Trusts, on behalf of local commissioners, to decide the future pattern of children’s heart services on the basis of the best available evidence.

Greg Mulholland: It seems nonsensical to deal with the provision of surgical services for adult and child congenital cardiac patients in separate reviews. Given the delay in the review of children’s services, does the Minister not agree that it is time to consider including them in the forthcoming review of adult services?

Simon Burns: I am grateful to the hon. Gentleman for his suggestion, but I am afraid that I do not share his view. As he knows, there will be a review of adult services, but it has always been considered most appropriate to deal with paediatric cardiac services before adult care, and that is what we will continue to do.

Julian Lewis: Although the paediatric heart unit at Southampton general hospital is rated the best in the country outside London, it was included in only one of four options under the review. In the past, the Minister has helpfully hinted he might not be confined to considering only those four options. Can he expand on that?

Simon Burns: I can expand on it by saying that it will not be me who considers the options. As I have told my hon. Friend before, this is an independent review. However, as he suggests, the JCPCT may decide on four, six or seven possible sites. It all depends on what the consultation produces, and the clinical decision on what is the most appropriate number of sites, which will happen eventually.
	I congratulate my hon. Friend on his championing of Southampton general hospital as the local Member of Parliament.

Cancer Drugs Fund

David Evennett: What recent representations he has received on access to the cancer drugs fund; and if he will make a statement.

Andrew Lansley: We have received a number of supportive representations regarding the cancer drugs fund. Indeed, the Rarer Cancers Foundation recently praised the fund for making additional cancer drugs available to almost 10,000 patients in England since October 2010. It contrasted that access to medicines in England with the lack of such access in Wales.

David Evennett: My right hon. Friend has cited the view of the Rarer Cancers Foundation. Does he agree that this policy has put patients and doctors back at the heart of decision making, and has transformed the ability of cancer patients to obtain clinically effective treatment so that they can gain precious extra time with their families?

Andrew Lansley: My hon. Friend is absolutely right. In the summer of 2010, we learnt from Sir Mike Richards’s review that patients in this country were less likely to have access to the latest cancer medicines within five years of their introduction than those in many other European countries. I am proud that so far the coalition Government have been able, through the cancer drugs fund, to help 10,000 patients to gain access to the latest cancer medicines.

Jim Shannon: I thank the Minister for that response. Last year, Cancer Research UK revealed that cancer deaths were down 20% since 1985 and survival rates have doubled in the last 40 years. Does the Minister agree that we must continue to research proactively and thereby continue to reduce deaths and ensure continuity of life?

Andrew Lansley: I am grateful to the hon. Gentleman, and he is absolutely right about that, of course. He will also be aware that Cancer Research UK highlighted not only the progress that had been made, but the variation in progress on different cancers. Harking back to the earlier point about innovation, we must focus on how some of these innovations will enable us to deliver improved survival rates for specific cancers, and I announced last month that we would be funding additional scanner facilities in this country—proton beam therapy scanning interventions—in order to enable some of the most difficult cancers, such as brain cancers in children, to be treated in this country effectively.

Duncan Hames: A cancer patient in my constituency faces an avoidable further round of chemotherapy having waited for the strategic health authority to make an individual funding request decision on the drug Plerixafor, which is not included in the cancer drugs fund. Will the Minister consider broadening
	the scope of the cancer drugs fund to include such drugs that are critical in cancer patients’ care, in addition to their other uses?

Andrew Lansley: I should be grateful if my hon. Friend would write to me about that. The cancer drugs fund is focused on an identified lack of access to cancer medicines, but if a drug is of particular benefit to a cancer patient, such as in the instance he describes, it should be possible for SHA panels to include it within the scope of the fund.

Valerie Vaz: Will the Secretary of State confirm whether those receiving treatment under the cancer drugs fund will also be guaranteed treatment under the new scheme?

Andrew Lansley: The intention is that from January 2014 as new medicines are introduced through the value-based pricing system, the reimbursement price in the NHS will reflect their value and therefore, by extension, they will all be available through the NHS.

Access to Drugs

Stephen Metcalfe: What steps he is taking to ensure drugs approved by the National Institute for Health and Clinical Excellence are made available to all patients in the NHS.

Andrew Lansley: The NHS is required to fund drugs and technologies recommended in NICE technology appraisals, in line with the NHS constitution. The NHS chief executive’s report “Innovation, Health and Wealth” sets out plans for the introduction of a compliance regime to ensure rapid and consistent implementation of NICE technology appraisal recommendations throughout the NHS.

Stephen Metcalfe: I greatly welcome the Government’s recent announcement on swift and proper implementation of NICE guidance that allows patients access to innovative treatments. In order for cost-effective treatments to secure NICE guidance approval, in the first instance will the Secretary of State ensure that NICE’s methodology review reinforces the importance of appraisal appropriately reflecting clinical practice when assessing new treatments?

Andrew Lansley: I am grateful to my hon. Friend, who clearly understands that NICE is responsible for the methods it uses in the development of its guidance and that it is undertaking a review of its appraisal methods. I expect that that will be published for consultation this year. NICE should issue final guidance only after careful consideration of the evidence and public consultation with stakeholders, including patient and professional groups.

John Healey: It is sometimes hard to follow the Secretary of State as he can get lost in his own jargon. Just to be clear: if NICE says that a drug should be available to patients on the NHS wherever they live and whatever their clinical commissioning group, will they get it? Can he give that guarantee today?

Andrew Lansley: The right hon. Gentleman knows perfectly well that that did not happen under the last Government. The NHS chief executive’s innovation report of early December made it clear that we will make certain that when NICE gives a positive appraisal for a medicine, it is automatically included in formularies, and also that we will establish an effective compliance regime in respect of NICE appraisals and establish a new NICE implementation collaborative to make it happen. As the right hon. Gentleman knows perfectly well, the legislation is clear: when NICE gives a positive appraisal, a medicine should be available across the NHS. That was not achieved under his Government. We will achieve that, and the NHS chief executive is setting out to show how that will happen in the future.

Marcus Jones: Under the current regime of primary care trust commissioning, my constituents in Warwickshire often complain to me that drugs approved by NICE are not always available locally but are available in neighbouring commissioning areas. What steps are being taken to ensure that new NHS commissioning boards and local commissioning groups promote the NHS constitution and the right of patients to access NICE-approved drugs?

Andrew Lansley: My hon. Friend makes exactly the right point, in that what the last Government said happened did not happen: such medicines were not available, and there was a postcode lottery in accessing many of them. That, among other reasons, is why the chief executive of the NHS published his report, which will introduce the NICE compliance strategy. We will require all NICE technology appraisals to be incorporated automatically in the local drug formularies, and the NICE implementation collaboration will support the prompt implementation of NICE guidance.

Fiona Mactaggart: Last week in my constituency, a community pharmacist refused to issue a blind patient with dosage packs unless they paid an additional fee. What redress will such patients have in the newly reorganised NHS regarding actions such as this by community pharmacists, which in my view are against the Disability Discrimination Act?

Andrew Lansley: I should be grateful if the hon. Lady wrote to me about that case and gave me the opportunity to look at it, which I would be pleased to do. From my point of view, we do not countenance such requirements, through charging, denying patients access to any NHS treatment.

David Tredinnick: In addition to approving drugs, NICE has also approved acupuncture for lower back pain. Should this not be widely available on the health service now?

Andrew Lansley: Of course, my hon. Friend will know very well that choice of treatment is a shared decision between patients and their clinicians. NICE appraisals are about whether treatments are available in the NHS and giving information to clinicians about their relative clinical and cost-effectiveness, not prescribing that treatments should be available in specific circumstances.

Fuel Poverty

Nick Smith: What discussions he has had with ministerial colleagues on the effects of fuel poverty on health.

Anne Milton: I and my officials have worked closely with the Department of Energy and Climate Change on the development and implementation of the cold weather plan for England, which aims to reduce the health impacts of cold weather on vulnerable people. We have also put £30 million into the warm homes healthy people fund to fund local authority projects to reduce the impact of cold weather.

Nick Smith: The Marmot report confirmed that cold homes are bad for our health. My local newspaper has highlighted the case of a low-income working family who have to choose between food and heat every day, with no help from their energy provider. Will the Minister ensure that energy companies do more to tackle fuel poverty, so that the NHS does not have to foot the bill for their profit?

Anne Milton: As I said, my colleagues in DECC are working closely with the energy companies. I point out to the hon. Gentleman that this coalition Government are the first to put in place the cold weather plan to reduce those 27,000 excess winter deaths. Perhaps his local paper would like to contact the Welsh Assembly Government to see what they are doing.

Daniel Poulter: Fuel poverty clearly shows the link between housing, health care and well-being. Last week, the Prime Minister called for a merger of health and social care. Does the Minister agree with me that if we are to have a true merger of health and social care, housing—through health and wellbeing boards and other mechanisms—has to be a key ingredient of that?

Anne Milton: Of course, my hon. Friend is absolutely right that the integration of health and social care is critical, particularly for issues such as this. The changes we are making to public health and the movement of public health into local authorities will only ensure better integration, so that we can reduce those 27,000 excess deaths.

Suicide Prevention

Madeleine Moon: What research his Department has undertaken on the prevention of suicide.

Paul Burstow: The Department of Health funds the national confidential inquiry into suicide and homicide by people with mental illness. The Department is funding an investigation of self-harm, and the National Institute for Health Research is funding a range of further research relevant to suicide prevention.

Madeleine Moon: The Minister will be aware that core funding for research into the causes, effects and geographical spread of suicide and its frequent precursor, self-harm,
	is essential. More than 200,000 people present at accident and emergency with self-harm. I am very concerned to hear that the ongoing funding for the multi-centre study of self-harm is potentially at risk. Will he agree to meet me and the research project leads to discuss this and ensure that that research continues?

Paul Burstow: The hon. Lady chairs the all-party group on suicide and self-harm prevention. She does a lot of important work in this House in that regard, and I would be only too happy to talk to her about research priorities in this area. The Government are examining the research priorities to support the new strategy, which we plan to publish in the near future.

James Gray: I pay tribute to the hon. Member for Bridgend (Mrs Moon), who has done fantastic work on the prevention of suicide. It is not the Department of Health’s job to regulate the worldwide web, but what work has the Department done on examining the link between the watching of violent websites—and, indeed, looking at websites that promote or facilitate suicide—and the actual carrying out of suicide?

Paul Burstow: My hon. Friend makes a very important point, which has been raised by a number of charities, including Papyrus, during the consultation on the draft strategy. It is important to stress that the internet industry has been willing to engage in positive initiatives, not the least of which is Facebook and Google’s work with the Samaritans to make sure that whenever anyone types in “suicide” a link to the Samaritans always appears first. However, more needs to be done and we need the industry to tackle those darker sides of the internet to make sure that they do not prey on vulnerable people and do not peddle suicide.

Robert Flello: Given the crucial role that the chief coroner was to have had in monitoring and advising the Department of Health on the incidence of suicide across the nation, will the Minister liaise with the Lord Chancellor to ensure that a chief coroner is appointed speedily and that powers are put in place quickly to make sure that this work can be done?

Paul Burstow: I will certainly pass on the hon. Gentleman’s request.

Telecare and Telehealth Services (Congleton)

Fiona Bruce: When he expects residents in Congleton constituency to benefit from investment in telehealth and telecare services by the NHS.

Andrew Lansley: I am pleased to say that patients in Congleton who have health conditions such as heart failure or chronic respiratory disease can already benefit from these technologies. I am committed to supporting the use of telehealth and telecare services by working with industry to improve the lives of 3 million people across the country who are living at home with long-term conditions.

Fiona Bruce: I thank the Secretary of State for that reply, and indeed innovative schemes in my constituency and across the Cheshire East council area, such as DemenShare, are already using this technology. But what other schemes and advances will the Government introduce for an area that has the highest level of elderly people per population head in the north-west of England and where the number of over-65s will grow by 50% and the number of over-85s is set to more than double by 2025?

Andrew Lansley: I am grateful to my hon. Friend for her question. She rightly talks about this increasing number of older people in the community and rightly says that we want to support them to be independent and to improve their quality of life.
	The whole system demonstrator programme was the largest trial of telehealth systems anywhere in the world. In the three pilot areas of Kent, Cornwall and Newham, it demonstrated a reduction in mortality among older people of 45%; a 21% reduction in emergency admissions; a 24% reduction in planned admissions to hospital; and a 15% reduction in emergency department visits. Those are dramatic benefits, which is why we are so determined to ensure, over the next five years, that we reach out to older people who are living at home with long-term conditions and improve their quality of life in this way.

Group B Streptococcus

Philip Hollobone: If he will consider proposals to introduce a national screening programme to detect group B streptococcus in pregnant women.

Anne Milton: The UK National Screening Committee is reviewing the evidence for screening for group B streptococcus carriage in pregnant women, and I am sure that my hon. Friend will be pleased to hear about that. The committee will review the international literature, and a public consultation on the results will open in spring 2012.

Philip Hollobone: Group B streptococcus is the UK’s most common cause of life-threatening infection for newborn babies. Will my hon. Friend agree to meet me and Group B Strep Support, the excellent campaign group, to see how calls for a national screening programme might best be advanced?

Anne Milton: I am certainly happy to meet my hon. Friend. I should point out that the Royal College of Obstetricians and Gynaecologists is updating its guidelines and that NICE is also developing guidance. The issue is complex, however, and even testing is not 100% effective. Women who produce a positive result during pregnancy might be negative during labour and, more importantly, those who are negative during pregnancy might be positive during labour. It is important that we get the most up-to-date evidence and ensure that we reduce the tragic consequences of this infection.

Joan Ruddock: I welcome the Minister’s statement, but may I urge her to consider carefully the kind of testing, as the false negatives and positives to which she refers come with the current
	testing and there are better tests? About 340 babies are affected every year of which one in 10 dies and one in five is permanently disabled. This is a very serious matter and I hope she will do all she can to deal with it.

Anne Milton: I will certainly do all I can to deal with it. As the right hon. Lady says, the consequences are tragic but this is a complex area that has changed quite rapidly. I think the US is now at a similar level of infection to us, but what remains a challenge is ensuring that we have an effective test that does not produce false positive or, more seriously, false negative results and that we have effective treatment that works in 100% of cases.

NHS Reorganisation Cost

Stephen McCabe: What recent estimate he has made of the cost to the public purse of NHS reorganisation.

Simon Burns: The cost of the NHS modernisation is estimated to be between £1.2 billion and £1.3 billion. That will save £4.5 billion over this Parliament, and £1.5 billion per year thereafter. We will reinvest every penny saved in front-line services.

Stephen McCabe: I am grateful for that answer. The Minister will be aware that the figure he has given is about half what the primary care trusts believe they are required to keep back to fund the reorganisation: they put it at £3.4 billion. Given his answer today, will he write to South Birmingham primary care trust to tell it that it no longer has to hold back £25 million for that purpose and that it can use that money to cut the 18-week waiting list, which has risen by 36% since he assumed office?

Simon Burns: May I say, in the nicest possible way, that I think the hon. Gentleman is a tiny bit confused? I think he is confusing the one-off costs of the modernisation with the 2% hold-back figures used by the PCTs, which put aside money—a process instigated by the right hon. Member for Leigh (Andy Burnham), which we carried on—that can be used if a PCT gets into financial problems. If it does not get into financial problems, it can then use the money to invest in front-line services.

Peter Bone: The Conservative-led coalition should be congratulated on introducing a measure that will get rid of red tape and bureaucracy by getting rid of strategic health authorities and primary care trusts. Do the Labour Opposition not look like dinosaurs when they try to defend those bodies?

Simon Burns: I am very grateful to my hon. Friend and I am always reassured when he congratulates the coalition Government, as it suggests to me that we are getting something right. My hon. Friend is absolutely right. As everyone who understands health policy in this country recognises, the NHS must evolve to meet changing needs and we are improving effectiveness and efficiency and saving money by cutting out administration and bureaucracy so that we can reinvest in front-line services to look after the health interests of all our constituents.

Andrew Gwynne: Figures revealed to the Opposition under freedom of information procedures show that GPs will receive up to £115 an hour for commissioning health care services on top of their existing salary. It makes no sense at all to take GPs away from patient care to become part-time accountants. When the NHS needs every penny it can get, patients will be astounded to hear that the Government plan to pay GPs twice. This comes at a time when 48,000 nursing posts are being axed and £3.5 billion is being set aside for the Minister’s bureaucratic upheaval. Will he now accept that the NHS can ill afford for money to be wasted on a top-down reorganisation that few want? Is it not now time for him to scrap the Bill?

Simon Burns: It is nice that the hon. Gentleman got the mantra in at the end—I have been expecting it all through this Question Time. He is wrong; what is important and what this modernisation has at its heart is the need for GPs to commission care for patients, because GPs are best equipped to know the needs of their patients. That is the way forward. Also, we are cutting bureaucracy and administration by 45% so that we can reinvest that money in front-line services. We want to spend money on health care and on improving outcomes, not on managers and bureaucracy.

John Pugh: May I congratulate the Secretary of State and the Prime Minister on the productive ward initiative? The NHS document “Top Tips for spreading The Productive Ward” says:
	“Set a realistic time scale. Take your time and do not rush. Take small steps and complete them before moving on to the next.”
	Is this advice generally applicable to NHS reform?

Simon Burns: As the hon. Gentleman recognised at the beginning of his question, this is important and excellent advice for nurses and other health care professionals to give care, consideration and attention to all patients so that they can be looked after in an appropriate and caring way. That is the way forward to making the health service more responsive to the needs of patients and to the improvement of health outcomes.

Seema Malhotra: What assessment has the Minister made of the impact of the NHS reorganisation on waiting times?

Simon Burns: The hon. Lady raises an extremely important point. The whole purpose of the modernisation of the NHS is to enable it to meet the challenges of an ageing population, an increased drugs bill and new medical procedures, so that we can ensure that patients get their treatments, within the responsibilities of the NHS constitution, and do not have to wait undue lengths of time for treatment.

Health and Social Care Bill

Chris Ruane: What recent representations he has received on the Health and Social Care Bill.

Simon Burns: The Government have listened to representations throughout the passage of the Health and Social Care
	Bill. In addition to the consultation on the White Paper, the NHS Future Forum has undertaken two engagement exercises. The first involved 6,700 people directly and received more than 28,000 comments and e-mails, and the second involved more than 12,000 people at more than 300 events. Ministers have also continued to meet and to receive representations from a range of interested parties on a regular basis, and we will continue to do so.

Chris Ruane: I thank the Minister for that response. May I ask what specific representations he has had on children’s well-being? Is he aware that the Children’s Society will this Thursday publish its 2012 “Good Childhood” report, which will include a specific report on how central and local government could improve and promote positive well-being among children? Will the Minister and the Secretary of State meet the Children’s Society to discuss that important report?

Simon Burns: Throughout the consultation process there have been comments and responses to proposals across the whole of the health area, including on children’s health and well-being. Obviously, I cannot comment on a report that will not be published until later this week, but I or one of my ministerial colleagues would be more than happy to meet the Children’s Society once the report has been published if the society thinks that a meeting to discuss the report’s contents would be worth while.

Stephen Dorrell: Against the background of the recommendation of the NHS Future Forum that a key priority for the future is greater integration between health care and social care—a priority that was explicitly endorsed last week by the Prime Minister—does my right hon. Friend agree that the key opportunity in the Bill, through the health and wellbeing boards, is to drive that agenda, which has been much talked about for many, many years now, and actually to start to deliver on that rhetoric?

Simon Burns: My right hon. Friend is absolutely right; of course, when he was Secretary of State he did a considerable amount of work to lay the ground rules for the move towards greater integration, because that is the way forward. My right hon. Friend makes a very valid point: it is the way forward and we fully recognise that. We are deeply committed to achieving that aim, and that is why my right hon. Friend the Secretary of State has added an extra £150 million to the existing £300 million, to facilitate progress towards it.

Andy Burnham: May I tell the Secretary of State and the Minister that he will receive more representations on his Bill later this week from two hospital doctors who, early this morning, began a 160 mile run to protest against his Bill, from Bevan’s statue in Cardiff to his Department? [Interruption.] The Secretary of State should listen. Let me remind him why people are so angry. Nobody voted for the Bill. It was ruled out by the coalition agreement, and it is now the unelected House deciding the future of the NHS, passing amendments that he was too scared to table in this House.
	Will the Minister today have the courage to admit that it is now the Government’s intention to allow NHS hospitals to make 49% of their income, effectively devoting half of their beds, from the treatment of private patients?

Simon Burns: May I say a happy new year to the right hon. Gentleman as well? I believe that his analysis of the support for the Bill is flawed, because there are a number of areas where a number of organisations warmly welcome its contents. For example, the BMA voted in favour of GP commissioning at its special general meeting last year.
	On the question of 49%, the shadow Secretary of State has been uncharacteristically forgetful, because of course he will appreciate that the cap applies only to foundation trusts, not to non-foundation trusts, and that is no different today from what it will be after the modernisation—and it was a policy that his Government brought in.

Andy Burnham: No, it was not. That policy would never, ever have come forward under a Labour Government—and I know that the right hon. Gentleman has not denied it. We, the Opposition, will now make it our business to tell every single patient in England about his plans for the NHS. People can finally see the Bill for what it is: a privatisation plan for the NHS. England’s hospitals will never be the same again if the Bill gets through: an explosion of private work; longer waits for NHS patients; profits before patient care. Will not the only choice on offer for patients be the old Tory choice in the NHS: wait longer or pay to go private?

Simon Burns: I am afraid that the shadow Secretary of State is just totally wrong. This Government have no intention to, and will not privatise the national health service. We want to improve patient outcomes and the patient experience. The right hon. Gentleman should look again at the 49% that he talks about, because we are not changing the situation, particularly because it does not apply to trusts at the moment; it is only for foundation trusts.

Andy Burnham: That is garbage.

Simon Burns: The right hon. Gentleman says it is garbage. I think that is confusing from him, because I remind him that of course it was in the Labour party manifesto at the last general election to remove the private patient cap.

Bowel Cancer Screening

Guy Opperman: What steps he has taken to implement a flexiscope bowel cancer screening test.

Paul Burstow: The IT system to support the pilots of flexible sigmoidoscopy screening is under development and local bowel screening programmes will be invited to become pilot sites shortly. We remain determined to deliver our cancer outcomes strategy commitment of 60% coverage across England by March 2015.

Guy Opperman: The Government rightly chose two out of the three pathfinder sites to be in the north-east, at South of Tyne and Tees. When will the date be given for local screening centres to be invited to bid to become pilot sites and have patients as a future part of that bowel cancer screening programme?

Paul Burstow: We debated these issues before Christmas. I can confirm that advice to local bowel screening programmes on bidding to become pilot sites will be published shortly and the process of recruiting pilots will start this month.

NHS Reorganisation Cost

Frank Field: What estimate he has made of the cost to the public purse of NHS reorganisation in (a) Birkenhead constituency and (b) England.

Simon Burns: The cost of the NHS modernisation is estimated to be between £1.2 billion and £1.3 billion. That will save £4.5 billion over this Parliament, and a further £1.5 billion each year thereafter. [Hon. Members: “It is a different question.”] It is the same question. We do not have a local breakdown of these figures, as that will depend on local decisions.

Frank Field: Perhaps the right hon. Gentleman will ask the House of Commons Library for the answer so that he can give it to me next time, and also look at the increase in the number of managers in Wirral over the past five years. The number has gone up by more than a quarter. With that size increase, why are those staff not being used to pilot his reorganisation?

Simon Burns: The right hon. Gentleman is absolutely right. There was a significant increase in managers in the NHS in the last two or three years of his Government. Since we came to power, there are just under 15,000 fewer managers and administrators, and 3,700 extra doctors.

Patrick Mercer: The Minister is well aware of the reforms to the NHS in my English constituency, but many of my constituents question whether they are getting value for money in view of the expansion of population in Newark over the next couple of years. Will he look again, please, at the Newark health care review?

Simon Burns: If my hon. Friend would be kind enough to write to me with specifics on the situation in Newark, I would be more than happy to look into it in detail and respond to him.

A and E and Maternity Departments

John Mann: How many (a) accident and emergency departments and (b) maternity units he expects will be (i) downgraded and (ii) closed between May 2010 and May 2015.

Simon Burns: The reconfiguration of local health services, including A and E and maternity services, is and will remain a fundamentally local process. What matters is that decisions about service changes are clinically driven, and that patients and the public are involved in those changes to ensure that they get the highest quality care.

John Mann: I refer to the answer that the Minister just gave to the hon. Member for Newark (Patrick Mercer). The buck stops with the Minister. Would he
	like to congratulate the SOS Save Our Services group in Bassetlaw, which in the past two months has overturned the proposals to downgrade A and E and maternity services at Bassetlaw hospital? Is that not a good example of the real big society?

Simon Burns: As the hon. Gentleman knows, on 20 May 2010 my right hon. Friend the Secretary of State brought in the four conditions that had to be met for reconfiguration, which included paying attention to the views of local stakeholders and the medical profession. So, as the hon. Gentleman rightly says, the decision has been taken not to proceed with the changes at Bassetlaw hospital. No doubt he also welcomes the £900,000 that is being invested to expand and improve Bassetlaw hospital’s A and E facility.

Jamie Reed: The whole House will note that the moratorium on hospital and ward closures has clearly ended, but as my hon. Friend the Member for Bassetlaw (John Mann) rightly said, the NHS risk registers held by regional and local health boards around the country clearly showed the risks associated with closures and the downgrading of hospital wards. The Government’s Health and Social Care Bill poses risks to the safety and quality of services, yet the Secretary of State has appealed against the Information Commissioner’s ruling that the NHS national risk register should be published. Members of both Houses may be denied the opportunity to scrutinise the real risks that the Bill poses to the NHS before they are asked to vote on it for a final time. Will the Minister give a binding commitment that the risk register produced by his Department will be published in full before the Bill returns from the Lords?

Simon Burns: The right hon. Member for Leigh (Andy Burnham) did not publish a risk register during his tenure. His predecessor, the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), did not publish the risk register on two occasions during his tenure. The bits relevant to the Health and Social Care Bill have been made public, but we will not be publishing the risk register because, as the hon. Gentleman knows, my right hon. Friend the Secretary of State is appealing, as he is entitled to do, against the Information Commissioner’s decision—[Interruption.]We have a right of appeal, which we are exercising, and we will have to wait until that decision has been reached on appeal. Until then, no we will not be publishing the risk register, because it is not necessary or appropriate.

Early Intervention

Graham Allen: What steps his Department is taking to prevent ill health and its associated costs through early intervention.

Anne Milton: The public health reforms have at their very heart the prevention of ill health and its associated costs, and the hon. Gentleman in his question clearly recognises the critical impact that intervening early can have. The health visitor work force are an important part of early intervention. We picked up a very demoralised and depleted health visitor work force, so I am pleased
	to report that training commissions for health visitors are up 200%, and we plan to double the number of family nurse partnerships available by 2015. We are also developing a vision for school nursing.

Graham Allen: The introduction of the family nurse partnership and the enhancement of the amount of money available to it is a great credit to the previous Labour Government and the current coalition Government. It enables single teen mums to get one-to-one help from a health visitor. Given the economic circumstances, does the Minister accept that we need to be a bit more inventive to ensure that that very good scheme goes even further? Will she discuss with the city of Nottingham and its health service a payment-by-results system to extend the family nurse partnerships further?

Anne Milton: Yes, we are supporting the development of social investment and outcome-based funding models, and I am pleased that the hon. Gentleman has raised the issue of being innovative about how we do that, because it is important. We had a rather static situation previously, so I welcome his interest in developing and testing a payment-by-results scheme in Nottingham, and we will be interested to see his detailed proposals and how that develops locally soon. What matters are the results that we get from the schemes.

Graham Stuart: I pay tribute to the hon. Member for Nottingham North (Mr Allen) for his work on early intervention and applaud the efforts made by the Minister to recruit more health visitors, but when will the Government be able to deliver the additional health visitors on the ground, trained and in service, in order to reverse the cuts in the health visitor service under the previous Government?

Anne Milton: My hon. Friend is right; we picked up a very depleted and demoralised health visitor work force. We have 26 health visitor early-implement sites and, as I said, a 200% increase in planned training commissions for health visitors. Turning this round takes a long time. I am sorry that we could not get started on it earlier, but this will have the critical impact: 4,200 health visitors by the end of this Parliament will give us the results that we need in turning round the fortunes of some of the most vulnerable families in this country.

Liz Kendall: Early intervention can transform health for children and young people and prevent bigger and more expensive problems down the line, yet the Government have cut funding for early intervention programmes, including Sure Start, teenage pregnancy and mental health in schools, by 11% this year and 7.5% next year. Is not the reality that it is this Government who are depleting and demoralising the health visitor work force, and that their short-sighted, short-term policies will make it harder to prevent poor health and cost us all more in the long run?

Anne Milton: The reality is that the Government are picking up a very depleted health visitor work force. School nurses, health visitors and the family nurse partnership are all critical. We picked up a very sorry state of affairs. The hon. Lady is right; early intervention
	matters, which is why we are doing it. I am just sorry that the previous Government did not take the action that was needed.

Topical Questions

Margot James: If he will make a statement on his departmental responsibilities.

Andrew Lansley: My responsibility is to lead the NHS in delivering improved health outcomes in England, to lead a public health service that improves the health of the nation and reduces health inequalities, and to lead the reform of adult social care, which supports and protects vulnerable people.

Margot James: My right hon. Friend will be aware that a significant number of private clinics that fitted women with Poly Implant Prothese breast implants are no longer in business. Will he advise the House on how he plans to strengthen not just the regulation of clinics offering cosmetic surgery, but the products that they use?

Andrew Lansley: I am grateful to my hon. Friend. I not only laid before the House a written statement this morning, but will, with permission, make a statement on the subject tomorrow. We have been very clear about the support the NHS will give to women who have had implants through the NHS, and we expect private companies to do the same. Not all will do so, and to that extent I make it clear that the NHS is there to support women in their clinical needs, whatever their circumstances.

Diane Abbott: The Secretary of State will be aware that thousands of women are worried and frightened about this issue. The statements he has made are welcome, but what practical help can he offer women whose private providers have not yet committed to offering free replacements?

Andrew Lansley: This is important, as the hon. Lady says. All the way through we have wanted to be absolutely clear that any woman who is worried should be able to go to her general practitioner. The NHS is there to support any women in their clinical needs, whatever their circumstances. I have made it clear that I expect private providers to match the NHS support through information and access to specialist advice, imaging and investigation, as necessary, and through the removal of implants if it is decided that that is necessary. If private providers will not do that, let me be clear, as I will explain further tomorrow, that the NHS remains available to support women in their clinical needs.

Karl McCartney: Does my hon. Friend the Minister believe that the Government’s aim of stopping people smoking is in any way helped by the chairman of the all-party group on smoking and health, thehon. Member for Bristol West (Stephen Williams), using a private letter that I sent to him, and copied to the Minister, to castigate me and make untrue allegations in my local newspaper last Thursday?

Mr Speaker: Order. I was doing my best to listen attentively—it is very difficult to hear clearly when there is so much noise. If there is to be a reference to another right hon. or hon. Member, advance notice of it should be provided. These courtesies must be observed. They are there for a good reason.

Anne Milton: I remind my hon. Friend that smoking kills over 80,000 people a year in the UK. We have published our tobacco control plan, are implementing the display ban and hope to consult soon on the future of plain packaging. The important thing to remember about improving public health is that it is not a party political issue. I cannot comment on the specifics of the case he mentions, but this is a matter that interests everyone across the House.

Chi Onwurah: The people of Newcastle are more likely to die early from cancer, health disease and stroke. On average, a child born in Newcastle today is expected to die five years before a child born in the Secretary of State’s constituency, so why is he changing the health funding formula so that in Newcastle we will lose 2.5% of our funding, whereas his constituency will see a rise of 2.1%?

Andrew Lansley: Let me remind the hon. Lady—she might not have noticed this—that before the Christmas recess I announced funding for the next financial year for all primary care trusts in England, and the increase for all primary care trusts is 2.8%. In contrast to the previous Government, we are setting out to reduce health inequalities, not least by focusing resources on public health on the basis of an objective measurement of disparities in health outcomes.

Robert Halfon: A BBC Essex investigation into Rushcliffe’s Partridge care home in my constituency has uncovered shocking allegations of abuse and neglect. Will the Minister urge the Care Quality Commission to step in now with an inquiry and take whatever legal action is necessary to protect the elderly residents? Will he meet me and my constituent, Lesley Minchin, who has a relative who has suffered as a result of what has been going on in the care home?

Paul Burstow: I certainly share my hon. Friend’s concerns. BBC Essex’s reports of abuse and degrading treating in that care home are cause for concern. The CQC is due to publish a report shortly and I am certainly happy to meet my hon. Friend to discuss the matter further. The Government are determined to shine a light on abuse wherever it is found and to root it out of the system to ensure that people are treated with dignity and respect and get the care they need.

Alex Cunningham: Does the Health Secretary agree with the Prime Minister that our nurses need greater supervision by patients’ groups on the ward to ensure that they are doing their jobs correctly, or does he recognise the tremendous job that they and their professional clinical managers are doing despite the huge cuts that the Health Secretary has forced on their numbers?

Andrew Lansley: I do indeed agree with the Prime Minister, but I would not characterise what he said in the way that the hon. Gentleman does. I was very interested to see a number of letters in The Times just this morning that highlighted that in the past, under patient and public involvement forums and community health councils, there was a direct public interest in seeing what happened in hospitals and in inspection. Through the Health and Social Care Bill and the establishment of HealthWatch, we will enable the public—representatives of patients—to be involved directly in assessing the quality of the environment in which patients are looked after. They will not supervise nurses. Nurses will be responsible for the experience and care of patients, but the public have a right to be participants in inspection—

Mr Speaker: Order. I am grateful to the Secretary of State.

Andrew George: When the Government introduced the Health and Social Care Bill a year ago, they did so with the claim that the NHS fails in comparison with its European counterparts with regard to patient outcomes. Now we know that that is not the case, will the Government withdraw the Bill?

Andrew Lansley: I do not agree with that characterisation of why we instituted the Health and Social Care Bill or of the current situation. For example, the OECD published in October its latest assessment of health in a number of countries. In too many respects—for example, in relation to serious respiratory disease—we have very poor outcomes relative to other countries. What we are setting out to do in any case is to deliver continuously improving outcomes and to get among the best in the world. In too many respects we are not yet among the best in the world.

Karl Turner: If the Prime Minister really wants to help nurses to focus on patient care, should the Secretary of State not listen to those nurses and drop this barmy, unnecessary Health and Social Care Bill?

Andrew Lansley: It is precisely because the Prime Minister and I listen to nurses that we met them and made it clear that we will support best practice. The hon. Gentleman and his colleagues should support nurse leadership on the wards. Nurses can see—through best practice, if they talk to patients about their experience every hour—that they can deliver better care. We will support nurses to deliver better care; he should support us in doing so.

Sarah Wollaston: I know the Secretary of State cares deeply about outcomes in health. Will he add his support to the campaign for a minimum price for alcohol in England and Wales?

Andrew Lansley: The Government will shortly publish our alcohol strategy, which will set out how we hope to deliver continuing success in the reduction of alcohol consumption and abuse.

Tom Blenkinsop: In a written answer on 12 December, the Minister of State, Department of
	Health, the hon. Member for Sutton and Cheam (Paul Burstow), who has responsibility for care services, told me that the Government felt that:
	“Local community hospitals provide a vital community resource to support patients in need of rehabilitation, recuperation and respite care”—[Official Report, 12 December 2011; Vol. 537, c. 560W.]
	What steps will the Government take to prevent the closure of the Chaloner Ward at Guisborough hospital and financially secure that hospital’s vital future?

Andrew Lansley: I am grateful for that question. I will certainly be happy to write to the hon. Gentleman on Guisborough hospital—I will not delay the House with the detail. I have those details, and will be happy to correspond with him.

Andrew Bridgen: The Prime Minister speaks of the “health and safety monster”; does the Minister believe it is right that advertising for personal injury lawyers should be displayed in hospital A and E departments, which many might think would feed the monster and make it bigger?

Simon Burns: I am very grateful to my hon. Friend for raising that, because it is an important issue. As he might be aware, there are rules and regulations: it is not acceptable for that sort of advertising in NHS hospitals. I would hope that any trusts behaving in that way immediately review their procedures.

Jim McGovern: Yesterday, I had a meeting with Patricia Osborne, the chief executive of the Brittle Bone Society, a UK-wide organisation that is headquartered in my constituency. It was made clear to me that given the current funding squeeze across the voluntary sector, the society is concerned about its ability to provide the vital services that it currently provides. Also troubling the society is the lack of support for adult sufferers of osteogenesis imperfecta. What can the Secretary of State tell me about the Government continuing to support that important society, and what more can they do to support adults with that condition?

Andrew Lansley: The hon. Gentleman will know that the Department of Health continues to support the voluntary sector considerably through section 64 funding and related support. If he wishes to write to me about the specific circumstances of the Brittle Bone Society, I will be glad to reply to him.

Chris Skidmore: I recently made a freedom of information request to all 170 acute trusts asking for the estimated total cost of missed out-patient and surgery appointments. So far, 61 have come back to me, and the cost is already over £1 billion. Will the Secretary of State seriously consider what we can do to tackle the enormous cost of missed appointments in the NHS?

Andrew Lansley: Yes. My hon. Friend makes an important point, and it is something the NHS must focus on. There are considerable opportunities through new technologies substantially to reduce the extent of missed appointments, including through things such as text
	messaging. What is frustrating is that, sometimes, appointments are missed because patients have not been adequately contacted by hospitals. As for people who abuse the NHS, I hope we will give them no excuses for not meeting their obligation to attend appointments.

Mike Gapes: Can the Secretary of State intervene with those involved with the health for outer north-east London programme to get them to allow the Barking, Havering and Redbridge University Hospitals NHS Trust to use the births and maternity capacity at King George hospital to take pressure off Queen’s?

Andrew Lansley: As the hon. Gentleman knows, following the independent reconfiguration panel report, which I accepted in full, the Barking, Havering and Redbridge Trust is looking to manage safely its maternity services, while improving the quality at Queen’s. It is doing that in close co-operation with NHS London and, indeed, with the advice of the Care Quality Commission, following the commission’s inspections. I will continue to be closely involved in that, and we will continue to support the Barking, Havering and Redbridge Trust in improving services for the hon. Gentleman’s constituents and others.

Philip Hollobone: In north Northamptonshire in 2010-11, there were 6,164 alcohol-related hospital admissions. That is four times the number just eight years before. What more can be done to tackle this horrendous increase in booze drinking?

Andrew Lansley: Time does not permit me to mention all the things that could be achieved, but let me just say that we are clear about the need, for example, to tackle below-cost selling of alcohol, and we are doing that; to stimulate more community alcohol partnerships, and we are doing that; and to accelerate public understanding of the consequences of alcohol abuse, and we are doing that, not least through Change4Life, additionally, during this year. There is more, but we will say much more in our alcohol strategy soon.

Hazel Blears: When the Secretary of State, together with the Prime Minister, visited Salford Royal hospital last week to praise the nurse leadership, was he aware that the hospital has cut 200 posts this year and is about to cut a further 200 posts over the next two years as a result of having to take 15% out of its budget? Does he not agree that nurse leadership is important, but that we also need the nurses on the wards to be able to deliver effective patient care?

Andrew Lansley: Of course I had an opportunity to talk to the chief executive, the nursing director and others at Salford Royal, and I was tremendously impressed, as was the Prime Minister, by the quality and leadership of the nursing, which demonstrated what he was saying about nursing—that there is best practice inside the NHS, and we need to spread it. The right hon. Lady is confusing a cost-improvement programme with a cut. I think Members on both sides of the House understand that the NHS is having to make efficiency savings, which involves shifting some resources from the acute sector and hospitals into the community. Right across the NHS, we have an increase of over £3 billion this year; next year, we have a 2.5% or 2.8% increase everywhere.

High-speed Rail

Justine Greening: This morning, I made a written statement to the House announcing my decision to give the go-ahead to High Speed 2—a national high-speed rail network. With the exception of High Speed 1—a 68-mile stretch of line—it will be the first major national railway line to be built in Britain since the Grand Central line opened to passengers in 1899. I would like to provide Members with further detail of the substance of, and rationale for, my decisions.
	I weighed up the evidence after one of the largest public consultations in our history. We wrote to more than 172,000 people living or working near the proposed line from London to the west midlands, visited communities along the 140-mile route and held 41 days of roadshows attended by almost 30,000 people over the five-month consultation period. Almost 55,000 responses were received from individuals, businesses and organisations across the country representing a wide spectrum of views. Many of those views were expressed strongly both in favour of and against high-speed rail, and I have considered them carefully in making my decisions.
	Since becoming Secretary of State for Transport, I have examined all the available evidence, including the work undertaken by my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond) and by the previous Labour Administration in developing the consultation proposals, the evidence submitted during the consultation, and the further work undertaken by my Department and HS2 Ltd. My decision had to consider not only the full environmental impact of HS2 but its benefits to our economy, jobs and our competitiveness not just today but decades into the future.
	I also had to be clear about the implications of not investing in high-speed rail—about how it would affect our leading cities, and how that would affect the road network and aviation. Generating growth, helping people back to work and supporting Britain’s companies and wealth creators so that they can compete and win in the global marketplace are at the top of the Government’s priority list, and, from day one in office, the coalition has had a laser focus on investing in and modernising our country’s transport infrastructure with unprecedented levels of investment.
	When it came to HS2, I could have made the easy choice: I could have gone for the short-term option, relying on a patch-and-mend approach and leaving our rail networks overstretched, overburdened and less resilient. But let us be clear: the price for that would have been paid in lost business, lower growth, fewer jobs and more misery for passengers on a network without the capacity to cope. We would have failed future generations depending on us to create the prosperous country that they will want to live in.
	Good government is about acting in the long-term national interest and about taking decisions, however difficult, to improve people’s quality of life and the country’s economic prospects not just for the next four or five years but for the next four or five decades. Our Victorian predecessors would have been immensely proud to see their railways providing massive benefit today —more than 100 years later—but as a result of today’s announcement the railway revolution that they started
	is happening again. We are ready for a new chapter in Britain’s transport history—one designed to boost our economy and our country just as the first coming of the railways or the motorways did for previous generations.
	That is why I have given the green light to HS2. In spite of the challenges of rising demand, our railways have been a huge success since privatisation. Passenger demand is growing year on year, particularly in the inter-city market. I recognise, however, that further rounds of upgrades to our major north-south lines, even if they offer apparently good value for money, can only provide a short-term fix—one that is incapable of meeting the long-term challenge. In truth, they could add only limited further capacity; they could not offer the step change in performance that passengers wish and need to see.
	What is more, upgrades would consign rail passengers and the vitally important rail freight industry to years, if not decades, of future engineering disruption, delay and unreliability—something that users of the west coast main line will remember only too well. The question, therefore, is not, “Do we build new lines?” but, “What type of line should we build?” And when we weigh up the economic and social rewards, there is only one answer: high-speed rail. A high-speed line will deliver £6.2 billion more in benefits to the country than a line running at conventional speeds, at an extra cost of only £1.4 billion. Therefore, by slashing journey times, as well as providing the step change in rail capacity that we need to keep the country moving, a high-speed line will give a return on the additional investment of more than four to one. A modern, reliable and fast service between our major cities and international gateways, as befitting the 21st century, will transform the way we travel, and promote Britain’s economic and social prosperity.
	HS2 will be built in two phases, to ensure delivery of its benefits at the earliest possible opportunity. Phase 1 will link London to the west midlands, as well as delivering a direct connection to the continent through the channel tunnel via High Speed 1. Even in the first phase, cities and towns off the HS2 network—such as Stockport, Warrington, Liverpool, Preston and Glasgow—will be served by trains able to use both HS2 and inter-city lines, saving over half an hour on journeys to London. Phase 2 will provide onward legs to Manchester and Leeds, with intermediate stations in the east midlands and South Yorkshire, plus a direct connection to our international hub, Heathrow airport. HS2 will also mean substantial time savings between Britain’s cities, reducing Birmingham-to-Leeds journeys from two hours to just 57 minutes, and Manchester-to-London journeys from two hours eight minutes to only one hour eight minutes. Edinburgh and Glasgow will benefit from a three-and-a-half hour journey time from London, encouraging modal shift from short-haul flights to high-speed rail.
	In delivering HS2, I look forward to working with the Scottish Government and others to identify and evaluate options for developing the high-speed network and further reducing journey times. However, I want to emphasise to the House that in making my decisions, I have been particularly mindful of our responsibility to safeguard the countryside and its wildlife, and to protect local communities as far as possible. I have worked hard to look at more tunnelling, to lower the route into cutting to reduce visibility, and to move the route away from homes wherever viable. I have looked hard at how
	we can better protect our landscape, our wildlife and our heritage. For that reason, my engineers have carefully re-examined the route in the light of all the evidence. I can therefore announce a package of alterations that I believe will significantly reduce the railway’s impact.
	Those improvements include a longer, continuous tunnel under the Chilterns from Little Missenden to the M25, and a new 2.75-mile bored tunnel along the Northolt corridor to avoid major works to the Chiltern line and impacts on local communities in the Ruislip area. Of the 13 miles through the Chilterns area of outstanding natural beauty, less than 2 miles will be at or above the surface. The rest will be in deep cutting or tunnel. There will also be a longer green tunnel past Chipping Warden and Aston le Walls, and another longer green tunnel to reduce impacts around Wendover, as well as an extension to the green tunnel at South Heath. There will also be a green tunnel past Greatworth. Those are just a few examples from the suite of improvements detailed in full in the Command Paper that I presented to the House this morning.
	The changes will bring significant benefits to communities and the environment. Compared with the consultation route, there will be a more than 50% increase in tunnel or green tunnel, now totalling around 22.5 miles. In addition, around 56.5 miles will be partially or totally hidden in cutting, as a key way of helping to reduce noise in neighbouring communities, and 10 miles less track along viaduct or embankment. In all, that means that around 79 miles—more than half the route—will be mitigated by tunnel or cutting. The revised tunnel alignment through the Chilterns will avoid an important water aquifier—[Hon. Members: “Aquifer.”]—aquifer—significantly reducing impacts on water. You see, Mr Speaker, I am always happy to listen to people when they see a better way of doing things.
	There will also be a reduction in the impacts on ancient woodlands and heritage sites. Communities affected will benefit from the changes, with a near 50 % reduction in the number of dwellings at risk of land take, and the number of households experiencing noticeably increased noise levels reducing by a third, to just over 3,000 properties.
	I have always been clear in my mind, however, that, whatever the mitigation measures, there can be little comfort to someone in knowing that the country will benefit enormously from HS2 when it is their house, or their business, that has to be knocked down to make way for it. The meeting that I had with MPs earlier last year allowed many of those representing communities along the proposed route to communicate the views of their constituents to me directly.
	So, to help people, we will bring in a package of compensation measures over and above those that affected homeowners are already entitled to under law. These include: a streamlined purchase scheme to simplify the statutory blight process for property owners; a sale and rent back scheme to give homeowners within the safeguarded area more flexibility; a streamlined small claims scheme for any construction damage; and a package of measures to reinforce confidence in properties above tunnels.
	Homeowners will be offered before and after surveys, a thorough assessment of the impact of similar tunnels, an explanation of the measures that will be taken to prevent perceptible vibration impacts, financial compensation for the compulsory purchase of subsoil, and a legally
	binding promise that HS2 will be permanently responsible for resolving any related settlement or subsidence issues. There will be also be a refreshed hardship-based property purchase scheme, and, finally, we will work constructively, and in a structured way, with local authorities along the line of route to minimise the negative consequences of HS2 and maximise the benefits.
	Having made the decision to press on with HS2, my intention is to drive it forward as fast as is practicable, so that we can gain from its benefits as early as possible and end the unwelcome uncertainty for those affected. A key part of this will be to engage fully and actively with organisations, communities and individuals along the whole route of the Y network. People presented legitimate concerns in the consultation and, even though we have made significant improvements, I am keen to work hard with local communities so that as many concerns as possible are properly addressed.
	I have instructed HS2 Ltd to undertake a range of activities to prepare for and deliver both phases of the network. It is my intention to introduce a hybrid Bill in the House by the end of 2013, including a detailed environmental impact assessment to provide the necessary powers to construct and operate the line from London to Birmingham. I have instructed HS2 Ltd to deliver this project at pace, but within milestones that will stand the test of time and with regular reporting to me on progress. The Major Projects Authority, which this Government launched last March to improve the performance of major Government projects in delivering on time and in budget, will provide critical support and oversight.
	This spring, we will consult on the draft directions for safeguarding the proposed route from London to the west midlands, as well as separately consulting on detailed compensation proposals. I aim to bring final safeguarding directions and an agreed compensation policy into effect later in the year. In March this year, HS2 Ltd will advise me on the route and station options to Manchester and Leeds, and in autumn 2012, we will start an engagement programme on a preferred route to discuss local views.
	I warmly welcome the political consensus on HS2, on the basis that it will help to ensure that the planning and construction of this transformational scheme are carried through to completion. HS2 matters to the long-term success and prosperity of the whole of Britain. It will help to create jobs, support growth and regenerate our regions. It will better connect communities and improve people’s opportunities, and, with its potential to attract people and freight on to trains and away from long-distance road journeys and short-haul flying, combined with the increasing decarbonisation of the grid, HS2 will be an important part of transport’s low-carbon future.
	Britain has faced such challenges before. The Victorian railway pioneers had the vision to build a rail network that has promoted growth and created jobs for more than a century. Those innovators transformed this country’s fortunes. Our industries flourished, our exports multiplied, and our economy grew wealthy. Half a century later, another generation had the vision to start building the motorway network. Post-war planners developed the motorway network, connecting major cities and transforming the capacity of our road network. Half a century on again, we now need to do for our Victorian railway what previous generations did for our road network. The time has come again to seize the moment,
	to be ambitious and to show the world that this is a can-do country. The lesson from history—and the lessons from our global competitors—is that no matter how hard times are, we cannot stop planning for the future or investing in our infrastructure if we want Britain to flourish. HS2 will be the backbone of a new transport system for the 21st century, offering the vital capacity that we need to compete and grow as a country. It will transform the economic shape and balance of our country, linking our major cities to a level previous generations could only dream of. By backing HS2, this Government are backing Britain, and I commend this statement to the House.

Several hon. Members: rose —

Mr Speaker: Order. I thank the Secretary of State for her statement, which was nevertheless significantly in excess of the allotted time for ministerial statements. An allowance for that will be made in the response from the shadow Secretary of State. The House can rest assured, as it can always rest assured, that I have the interests of Back Benchers at heart. They need not worry; if they want to get in, they will be heard.

Maria Eagle: May I begin by thanking the Secretary of State for advance sight of her statement? I welcome her decision today. As the right hon. Lady was generous enough to say, it was the previous Labour Government who started us on the journey that has now reached this important milestone. I pay tribute to the former Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) for having the boldness to set out a vision for a new high-speed rail line to address the capacity issues on our existing mainlines while cutting journey times across Britain. This is a vital project for the country, and I welcome the decision to give the green light to this investment in the face of considerable opposition—not least from many of the Secretary of State’s own colleagues, including from inside the Cabinet.
	Labour Members believe that it is vital that the new high-speed line is built—not just between London and Birmingham, but on to Manchester and Leeds. So while I welcome the commitment given today to the whole HS2 scheme, there will be disappointment that the Government’s announcement has stopped short of committing to legislating for the entire route to Manchester and Leeds in this Parliament. That was always Labour’s intention, as confirmed by the former Transport Secretary Lord Adonis in his evidence to the Transport Select Committee—a position the Select Committee said had merit.
	Of course it is right that a single Bill would need to await completion of preparatory work for the second phase of the route. However, by introducing it later in this Parliament and carrying it over to the next, as we did with the legislation for Crossrail, we would secure Parliament’s approval for the whole route at an earlier date than under the Government’s plans. That would, of course, open up the possibility, if it proved feasible, of beginning construction in the north as well as the south—something that the Transport Select Committee urged the Government to consider. The Secretary of State should do so and the Government should think
	again on the issue of using a single piece of legislation to make HS2 possible all the way to the top of the Y route. At the very least, will the Secretary of State agree, as a minimum, to follow the Transport Select Committee’s recommendation to include a “purpose clause” in the hybrid Bill that she plans, providing statutory force to the commitment to continue the scheme to Manchester and Leeds?
	Turning to other issues in the statement, the Secretary of State says that there will be “direct links to Heathrow airport and the continent via the HS1 line”. There will be disappointment that the Government have not accepted the case—not least in her own team—to build a transport hub at Heathrow, enabling a direct connection between the airport, HS2, Crossrail and the Great Western mainline at one site. The Minister of State, Department for Transport, the right hon. Member for Chipping Barnet (Mrs Villiers) is on record as saying that
	“failing to take high speed rail through Heathrow…would be a big mistake”.
	This is a failure to learn the lessons of successful high-speed rail schemes across the world. When the Government claim this route would cost more, they fail to include the cost of building the spur; and when the Government claim it would increase journey times, they fail to make clear that this hub would be instead of Old Oak Common and would allow for non-stopping services.
	Can the Secretary of State confirm the cost of building the separate spur to Heathrow? Can she confirm that the Government’s intention is to enable at least the possibility of direct services between Heathrow and the continent at the end of phase 2? Can the right hon. Lady tell the House what discussions she has had with the European Commission over the potential for EU funding towards the costs of HS2? Is it correct that the decision not to take the route via Heathrow and the concerns over the planned link to HSl mean that such support is less likely to be forthcoming?
	In respect of Scotland, the Secretary of State has said that HS2
	“will form a foundation for a potentially wider high speed network in years to come.”
	Can she confirm that the Government still intend to begin discussions with the Scottish Government on the future development of the network to Scotland during the next Parliament? When do they expect to start work on the business case for further extensions beyond the Y?
	As for what the Secretary of State said about mitigation and costs, I welcome the steps that she has taken to address some of the concerns that led the Labour party to propose its alternative route, although none of these measures addresses the impact on the Chilterns as effectively as would a route via Heathrow. It is the Government’s own stubbornness that has forced them to commit themselves to significant additional spending to prevent a Cabinet resignation.
	Will the Secretary of State tell us what the extra cost of each of the new mitigation proposals that she has announced today will be, and whether those costs will be met within the existing cost envelope for HS2? What assessment of value for money has she made in respect of the costs of these measures, compared with those of offering greater protection to the Chilterns through a different alignment? I welcome the mitigation measures
	proposed for London, although there remains a significant impact on the area around Euston station. Will the Secretary of State assure the local community in Camden that she will listen to their concerns, and will take appropriate steps to mitigate the impact of the redevelopment of Euston station? What discussions has she had with Transport for London on how best to address the concerns that have been raised about the impact of the very large increase in the numbers arriving at Euston on HS2?
	There has been considerable debate about the affordability of building the line, but not about the affordability of using it once it opens. I note that the Secretary of State had nothing to say about that in her statement. Does she agree with us that now is the time to move the debate from whether we should build to discussing the type of high-speed rail network that we want to see in this country? Her predecessor as Secretary of State—I am pleased to see that he is present—told the Transport Committee:
	“If you are working in a factory in Manchester you might never get on HS2, but you will certainly be benefiting from it if the salesman and sales director of your company is routinely hopping on it to go and meet customers, to jet around the world from Heathrow in a way that brings in orders that keep you employed.”
	Is that not precisely the wrong approach to high-speed rail? Does the Secretary of State agree that we need a high-speed rail network that is affordable for the many and not the few—a network that is not a “rich man’s toy” or simply a business class service?
	Today we have reached an important stage in the development of high-speed rail in this country, a process begun by Labour. I hope that the Secretary of State will consider the issues that we have raised. This is a major scheme which deserves proper scrutiny. We have raised questions with the clear intention of ensuring that we have the best possible high-speed rail network, one that the country needs and deserves. We strongly support the building of HS2. [Hon. Members: “Hurray!”] I said that in the first sentence of my reply. I look forward to working on a cross-party basis with the Secretary of State and her colleagues to ensure that parliamentary approval is secured, and that this vital project can move ahead and become a reality.

Justine Greening: I am delighted to hear that the Labour party supports our high-speed rail proposals. As I think even Labour Members would have to admit, the original proposal did indeed come from my party. I must point out that high-speed rail did not feature in the Labour Government’s 2007 White Paper setting out the 30-year vision for the railways. However, we are pleased that Labour has belatedly seen the real potential of a high-speed rail network in Britain.
	The hon. Member for Garston and Halewood (Maria Eagle) asked about legislation for the full Y network. I am considering whether it is possible for us to build that into the hybrid Bill, but I can give a categorical assurance that I have decided that we should go ahead with the full Y network. I have also announced today the final decision on the route of phase 1 of that network.
	The hon. Lady asked about Heathrow, which has clearly been an important aspect of the issue. HS2 will go directly to Heathrow. That will happen as part of phase 2. People will be able to get on a high-speed train
	in Birmingham that goes direct to Heathrow. The hon. Lady raised the question of whether HS2 should go directly via Heathrow. The last Labour Transport Secretary of State, Lord Adonis, looked at that, and he concluded— as did I and my predecessor, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond) —that that is not the most cost-effective or line-effective route for the line to take. It would be a longer line, and it would be more expensive.
	The hon. Lady asked whether we will seek EU funding. The business case we have presented to the House today is based on a working assumption that the £32 billion cost of this railway will come from the rail budget—that it will be taxpayer-funded. The business case would improve if we were able to get private sector and EU funding. We believe that this is a high-value project and we will look to see whether we can secure such contributions, especially from the private sector, and they would make that business case even stronger than it already is.
	I am keen to talk with the Scottish Government about their aspirations for high-speed rail further north. Their desire to see this project go ahead underlines its strategic value to the entire UK, not just the London-to-Birmingham part of our country.
	On mitigation, the hon. Lady raised the important question of how we tackled the issue of the line going through an area of outstanding natural beauty in the Chilterns. I want to emphasise that I looked very hard along the entire line. I understood the specific concerns people had in respect of this AONB, and I took them very seriously, but I looked at the whole line to see how we could mitigate its impact on local communities wherever possible, because that is important and the right thing to do. The changes in the Chilterns that we have made will result in that stretch of the line costing in the region of £250 million to £300 million less, because the engineering solutions we have found will involve less use of deep cutting. That will mean that we have less spoil, and the removal of spoil is often what causes huge expense. I hope that provides some reassurance to the hon. Lady. For some parts of this route, improving the line is good not only for local communities but for the business case for the line.
	The hon. Lady also raised the question of the redevelopment of Euston station that will happen as part of HS2’s phase 1 proposal. We believe the line coming into Euston can be part and parcel of the regeneration of the Euston area. We must ensure that Euston makes the most of the investment that will go into Euston station. I fully understand that two-thirds of the homes that will be demolished will be next to Euston station, and we will work very closely with Camden council. A number of statutory processes are already in place to provide safeguards for tenants who will be affected, but I can assure the House that I will work very closely with Camden council in considering how we can minimise the impact of the redevelopment of Euston station on current residents. I will, of course, also be delighted to work with the Mayor in considering traffic flows on the tube and how high-speed rail will interact with our tube network.
	The hon. Lady asked about affordability and pricing, and I agree that that is very important. The business case we have done assumes a pricing level that is the same as the standard pricing on the current network. That has been the presumption. As we get closer to the finalisation of the route and its development, I am sure
	we will look at the pricing, but I can assure the hon. Lady that the success of this high-speed railway network will be based on its being used by many people, not a few. I have no doubt that the pricing of the tickets will be set in order to achieve that.

Several hon. Members: rose —

Mr Speaker: Order. Given the intense interest, I appeal for brevity, led by one of its exemplars, Mr John Redwood.

John Redwood: Will the Secretary of State tell us how much the Government propose to spend on the project during this Parliament, and will she confirm that no construction contracts will be let during this Parliament?

Justine Greening: No construction contracts will be let during this Parliament, and my understanding is that the spend over the course of this Parliament will be in the region of a couple of hundred million pounds.

Bob Ainsworth: As the city closest to the first non-London station, the potential investment benefits to Coventry are considerable. Is the Secretary of State prepared to meet a delegation to discuss the links between the city and that first station, so that Coventry maximises the benefits from HS2?

Justine Greening: The short answer to that is an absolute yes.

Julian Huppert: The Liberal Democrats were the first party to push for high-speed rail, back in 2004—[ Interruption. ] I realise that the Opposition may not appreciate the fact. I am delighted that the coalition is going ahead with this, and I congratulate the Transport Secretary on that decision. Phases 1 and 2 will bring great benefits, and the news about phase 2 going to Manchester and Leeds is very welcome. Can she say something about her future aspirations for the connection through to Scotland?

Justine Greening: As I said, we are very keen to ensure that we progress phases 1 and 2 as quickly as possible, and I will be in discussions with the Scottish Government about the future development of the line that they have aspirations for, as well.

Frank Dobson: I am sorry, Mr Speaker, if I break into this aura of unanimity. I represent people living around Euston, 350 of whom will lose their homes, and up to now they have received no guarantees whatever from Ministers, the Department or the HS2 project team. The area has already seen the abandonment of the intended rebuilding of a Roman Catholic convent school, part of the site of which will be taken, and a large number of small businesses will be put out of business as a result of this. Also, Euston will be even more overcrowded when the new line comes in, and there are no proposals whatever to improve the connections, by tube or bus, to Euston station to take the extra traffic.

Justine Greening: The right hon. Gentleman raises the wider point that we will need a broad-based strategy if HS2 is to come into Euston—the broader regeneration of Euston that I believe can take place alongside HS2 and the redevelopment of Euston station. I am absolutely committed to doing whatever I can: to work with Camden council, and to meet the right hon. Gentleman separately to talk about what we can do to minimise the disruption to local residents while HS2 is being built and in the years beforehand. There are statutory processes that I am very happy to talk through with him in detail, and I look forward to doing that.

Andrea Leadsom: My right hon. Friend has been very patient in hearing from me many times about the concerns of my constituents, many of whose communities will be blighted by this high-speed rail line. She is also well aware of my concerns about the economics of the project. How sure is she that the actual costs in their entirety will be kept to the amounts we have been talking about, and how realistic is it for Britain to afford this project at this very difficult time economically?

Justine Greening: I would argue that we cannot afford not to do this. The cost to the taxpayer will start once Crossrail has finished. On the overall costs, High Speed 1 was brought in on time and on budget, and our costing includes a substantial allowance for so-called optimism bias, because we know that such projects tend to grow in cost. If anything, I would aim to bring it in under the amount we have budgeted for, but we have allowed for some optimism bias, as we do for these projects.

Glenda Jackson: While thanking the right hon. Lady for switching on the green light, I note that she referred in her statement to “a package of measures to reinforce confidence in properties above tunnels”. That issue affects many of my constituents. When and to whom should my constituents make representations to have their concerns calmed?

Justine Greening: I will be writing today to all the people affected directly by HS2, and that will include making sure that people in areas that will have tunnels underneath them will receive all the details they need to understand how this process will work.

Kwasi Kwarteng: Will my right hon. Friend say a few words about the massive capacity that is going to be added to freight lines, so that we can encourage greater use of the railway in transporting freight around the country?

Justine Greening: One of the things we have seen in recent years is freight switching from road to rail. HS2 will have the advantage of freeing up the capacity on the conventional railway network, which will see that renaissance continue. We hope that it will have even more force behind it than it has had already.

Richard Burden: Today’s announcement is very good news for Birmingham. May I say to the right hon. Lady that two things are just as important as our connectivity to London? The first is connectivity to the north, so I ask her to act on the optimistic noises she has made about possibly changing
	the hybrid Bill to include the second phase. The second is to ensure, as my right hon. Friend the Member for Coventry North East (Mr Ainsworth) said, that HS2 unlocks potential in the local transport network in and around Birmingham and the wider west midlands. Will she take that on board? Those are the things that will really maximise the benefits of HS2 to the midlands.

Justine Greening: I will take both those things on board, and indeed I will be in Birmingham tomorrow. When we look at high-speed rail in other countries, we see that the countries that have had the most success with it are those that have looked at projects more broadly, so we must ensure that HS2 provides broader connectivity than just to the areas it drops in at.

Mark Field: It is fair to recognise that the right hon. Member for Holborn and St Pancras (Frank Dobson) makes a valid point about Euston station and the rail capacity of that particular area. Has the Secretary of State given any particular thought to the idea that there should be a nodal link at Old Oak Common, which would link up Crossrail and HS2, thereby ensuring that a large amount of the traffic that would otherwise get caught up in Euston is enabled to go through central London via a different route?

Justine Greening: I think that is such a good idea, which is precisely why it is part of the plan.

Louise Ellman: It is essential that the UK has a high-speed rail network, and I welcome today’s statement as it helps to achieve that. The Secretary of State said that she was considering how to include in the hybrid Bill a commitment to the whole of the Y network. Will she tell us more about that? Will she assure us that the money that goes to funding the very important high-speed rail network will not be at the expense of essential investment in the existing classic line to develop both passenger and freight services?

Justine Greening: I am actively examining how we can provide more legal assurance in relation to the full Y network. However, we ultimately have to recognise that if this high-speed rail line is going to happen, it will need political will above all else. What I am saying is that the Government have the political will to go ahead with this Y network and that is the thing that matters most. I can assure the hon. Lady that I intend to make sure that we continue to see that level of investment that our current railways so badly need.

Steven Baker: I was delighted to hear that additional protections for the Chilterns will reduce costs. Will the Secretary of State consider tunnelling the entire width of the Chilterns?

Justine Greening: Yes, I did that. That approach would have cost £1.2 billion and I believe it is unaffordable.

John McDonnell: Because the Heathrow link will be in phase 2 of the project, my constituents will not know their futures until late 2014. Will the Secretary of State ensure that HS2 Ltd opens
	up its books and shares the information about the range of options it is considering for the link at the earliest stage?

Justine Greening: One of the things that we have always tried to balance is getting assurance about what our lead proposals are so as not to cause unnecessary blight and trying to share information with residents as soon as possible. I believe that we will be able to start informally consulting local groups later this year and in 2013. We will do the formal consultation—the sort that the hon. Gentleman has seen on the first phase of this route—in 2014.

Stephen Hammond: I commend my right hon. Friend on her statement. Will she assure me that she was aware that the chief executive of Manchester city council said last week that this was a most significant decision for the north of England’s economy? Will she confirm that she still expects the monetised value of the scheme overall to be in the order of £50 billion?

Justine Greening: I can confirm that when we look at the key people pushing for this scheme, we notice that the key economies and great cities in the north will see the benefits. The monetised total value is upwards of £40 billion, even £50 billion. Ultimately, however, we must recognise that that calculation takes place over a 60-year time frame. Anybody building the railways back in Victorian times would never have counted the benefit we get from them today, which is very real, and the potential benefit of HS2 is significant.

Dave Watts: Does the Secretary of State really think that people will believe the costings she has set out, given the past history of building railways and Government schemes? Will she give an assurance that the route will be extended to the north-west as, frankly, most people believe that they have more chance of travelling on the Tardis than HS2?

Justine Greening: In terms of costs, there is safety in two things. High Speed 1 was delivered on time and on budget by the last Conservative Government. I aim to have a much better performance than we saw from the Labour Government on the west coast main line, where a £2 billion planned upgrade mushroomed to £9 billion. Finally, I can assure the hon. Gentleman that his constituents will see the benefit of phase 1 from day one. In many cases, the HS2 trains will be through-running trains that, having saved that time on the high-speed network, will continue their journey further north on conventional lines. I think that will benefit far more cities than just London and Birmingham.

Mark Pawsey: May I advise the Secretary of State that today’s announcement will be heard with concern in Rugby? We currently have an excellent service to London on the recently upgraded west coast main line, but we will be completely bypassed by High Speed 2. What steps will be taken to ensure that cities and towns on the legacy line will retain the speed and frequency of their existing rail links?

Justine Greening: High Speed 2 is critical for places such as Rugby, which have been so constrained by capacity on the conventional line. One of the benefits of
	HS2 is that it will free up capacity for better connectivity to places on existing lines, just like Rugby.

Alison Seabeck: Warrington gets its journey cut by half an hour—lucky Warrington. Plymouth is a bigger city than Warrington and we have no high-speed link to the south-west. As regards the concern raised by my hon. Friend the Member for Liverpool, Riverside (Mrs Ellman), the Chair of the Transport Committee, will the Secretary of State confirm that top-slicing will not happen to other budgets and that the south-west main line down to Penzance will still get further investment?

Justine Greening: We are about to continue the process on the high-level output specification, or HLOS2, and that will consider future investment in lines such as the great western line, which will be connected to HS2 via the Old Oak Common interchange. That will benefit the hon. Lady’s part of the country as well as everybody else’s.

Jo Swinson: I welcome the Transport Secretary’s commitment to high-speed rail and the fact that she is keen to have discussions with the Scottish Government about extending the route to Glasgow and Edinburgh, which would bring additional economic benefits of some £25 billion and carbon reductions from more modal shift from air to rail. What does she see as the main barriers to making high-speed rail to and from Scotland a reality and how can we best overcome them?

Justine Greening: There are always barriers and challenges in dealing with such significant infrastructure problems, not least money and ensuring that finance is in place. As we have seen with phase 1, we must be incredibly careful that the route minimises the impact on local communities while maximising the economic impact that communities can get out of it. There is a long process to go through as regards talking with the Scottish Government, but I am keen to engage with them on it.

Graham Stringer: The Secretary of State’s statement will be welcomed throughout the whole of the north of England, as the chief executive of Manchester city council said, but there will be a worry in the back of some people’s minds that we were promised trains through to Paris when the channel tunnel legislation was agreed but we did not get them and that the same thing will happen again. It is not just a matter of political will. People in the north would be reassured if the Secretary of State gave a commitment to align stations and resources to build the routes to Manchester and Leeds as soon as possible.

Justine Greening: I can give the hon. Gentleman that commitment. I certainly am not going to take any longer than we need to take to progress the full Y network. One aspect of the first phase that I have not mentioned yet is that it will connect HS2 through to HS1, so there will be that link directly to the channel tunnel and the European high-speed rail network, which will be hugely beneficial.

Anne Main: I have serious concerns about this planned project, particularly regarding the business case. Will the Secretary of State comment on the comparisons that can be drawn with the high-speed rail links in Spain and France? In France, it was the major hub city of Paris that grew, rather than Lyon, and in Spain, it was Seville that was caused expense as a price of the growth of Madrid city. There is concern in this country that the north might not get the projected benefit and that instead it might be London that grows and benefits.

Justine Greening: I have huge respect for my hon. Friend and I normally agree with her on most things, but I have looked at this case incredibly carefully. Let me say two things. First, cities such as Lyon and Lille have massively benefited from high-speed rail in France. Secondly, let us see what the north thinks. Manchester thinks this project is vital, Birmingham thinks this project is vital, Leeds thinks this project is vital and Sheffield thinks this project is vital. It is time to make it happen.

Gisela Stuart: The Secretary of State will get a very warm welcome in Birmingham tomorrow, but that welcome might be even warmer if she gave a clear commitment to a purpose clause in the hybrid Bill and if she could bring that Bill forward to 2012 rather than 2013.

Justine Greening: I do not think I can add anything further to my comments about my commitment to the Y network. In terms of the time it will take us to develop the hybrid Bill, we are doing it as fast as we can. I want to make sure that the Bill comes to the House in a proper and robust state, and that means doing a proper environmental impact statement and working with local communities, which will take some time. This is a big project and we are going to get on with it, but I will make sure that it has the time that all that will take. At the moment, it looks as though the Bill will come to the House in late 2013.

David Mowat: With a benefit-cost ratio of over 2.5, HS2 is a much better business case than Crossrail, which has just been accelerated. Will the Secretary of State consider accelerating phase 2 of this scheme so that it can reach the north before 2032?

Justine Greening: I am looking at all the ways in which I can progress this project as fast as possible. At the moment, it looks as though the 2032-33 time frame is the fastest by which we can bring it to fruition. I hope that the House has seen today my desire to get on with this project and I will continually look at ways in which we can deliver it faster.

Jim Cunningham: Can the Secretary of State say what impact the proposal will have on the frequency of services from Birmingham to Euston?

Justine Greening: I think we will see a huge improvement. Not only will more capacity be released on the conventional lines, but the high-speed line will serve those stations.

Julian Lewis: The previous Secretary of State for Transport is now running Defence, where we are implementing major cuts in each of the armed services. Does this Secretary of State understand why those of us who are concerned about other areas of Government wonder whether these priorities are not rather perverse in the present economic situation?

Justine Greening: I absolutely want to see the investment in our armed forces that we need for our country, but we also have to make sure that we look to the future for our transport system and the role that it plays in helping our economy to prosper, grow and create jobs. That is what today’s announcement is all about.

Hugh Bayley: The map that the Secretary of State published today shows the network continuing north of Leeds to join the east coast main line. Is she considering joining that at York, and is she aware that there is a major development site right next to York station? If that is her intention, she needs to state it early to make sure that the land is available.

Justine Greening: I am very grateful to the hon. Gentleman for flagging up that opportunity. I have no doubt that over the coming weeks and months he will want to set out some of those ideas in more detail. Over the course of this Parliament, we will be putting significant effort into developing High Speed 2—I think we will spend something like £750 million in total—and I am sure the hon. Gentleman will want to ensure that he puts his views forward.

Rehman Chishti: Can the Minister clarify and confirm that real concern was expressed prior to the introduction of High Speed 1 in Kent, but since then there has been real economic regeneration and growth in the south-east and Kent?

Justine Greening: I absolutely agree with my hon. Friend, and I think it shows that we are right to get on with this project today, but we are also right to work with local communities, and they can see huge benefits from high-speed rail when it comes to their communities.

Katy Clark: I welcome the Minister’s statement. Elsewhere in Europe, high-speed rail has been kept affordable by keeping it in the public sector. Will she make a commitment that this will be kept in the public sector in this country?

Justine Greening: I cannot make that commitment. We are just at the business of assessing what the line route is—I made my decision on that today, and will continue to develop the phase 2 route. I think decisions about how the train service will be operated are ones for further in the future, but of course we will look to do what we think is best value for the taxpayer and the travelling passenger.

Iain Stewart: The long-term benefits that High Speed 2 will bring to my Milton Keynes constituents will be welcome, by freeing up capacity on the existing line. However, there is overcrowding now, which will get worse before High Speed 2 opens. Will my right hon. Friend assure me that the Government
	will continue their impressive record of investment in the classic network, to meet demand in the period before HS2 starts?

Justine Greening: I can tell my hon. Friend that there will be 106 extra carriages serving his stretch of line, and I think that shows that this Government are committed to making sure that we get investment in our railways in the short and medium term as well as the long term.

Chris Bryant: I am as keen on the Secretary of State for Wales as anybody else is, and I am delighted that the Secretary of State for Transport has done so much to keep her in her job, but can she be precise about the amount of money that is being spent on tunnelling in the constituency of the Secretary of State for Wales, because the total amount being spent in Wales on the railways this year is just £500 million?

Justine Greening: I would have thought the hon. Gentleman would be pleased, because the route that I announced today will see us spend less money in my right hon. Friend’s part of the country. The way in which he has turned what I took to be the incredibly serious issue of this line impacting local communities in an area of outstanding natural beauty into a pure political point is a disgrace. The Secretary of State for Wales, alongside other MPs, has done a damn good job in representing her constituents, and I think she has probably been a lot more effective than he has been in the past.

Martin Vickers: I welcome the Secretary of State’s announcement. Many of my constituents work at Tata Steel in Scunthorpe, where rail production is one of their most profitable lines. Can she give me a categorical assurance that everything possible will be done to ensure that the procurement procedures favour British-based companies?

Justine Greening: My hon. Friend will know that one of the things I am committed to doing in my role is to bring about a more strategic relationship, in terms of our procurement, with suppliers in the UK, and non-UK suppliers. I think that puts companies in production in the UK in a good position. There is unprecedented investment going into the railways at the moment. I have just announced the biggest railway infrastructure project that this country has seen in over a century. I think that is good news for Britain, but also good news for jobs and good news, hopefully, for companies like Tata.

Andy Slaughter: The Secretary of State dismisses in one sentence the Select Committee’s recommendation that the London terminus should be at Old Oak rather than at Euston. Will she look at that again, or at least publish the evidence on which she bases that view, and will she assure us that the mitigation will apply at least as much to Labour seats in west London as Tory seats in the Chilterns?

Justine Greening: We looked very carefully at where the HS2 line should terminate when it got to London. Our decision was that it was far better to terminate it in London than, as it were, at Old Oak Common, which would have seen people then have to transfer again.
	[Interruption.]
	The hon. Gentleman says Crossrail, but of course they would have to transfer on to Crossrail. That is an added advantage that they will have, but we believe it is far better for HS2 to come in to Euston.
	I can assure the hon. Gentleman that I worked as hard looking at mitigation elsewhere on the line as I did looking at it in the AONB in the Chilterns, and I am committed to making sure that I continue to do that throughout this entire process.

Dan Byles: The Transport Committee’s detailed report raised a number of serious questions about the business case and the technical assumptions behind HS2. It also made the clear recommendation that the Secretary of State should not make a decision on HS2 until she had addressed those questions. Can she explain why she has chosen to ignore that clear recommendation?

Justine Greening: I think my hon. Friend would be the first person to agree that the Transport Committee’s overall comment on HS2 was that it was a good value-for-money project. The engineers have looked in detail at every aspect of HS2. I encourage my hon. Friend to look at the plethora of reports that we have put out today, many of them giving technical detail. I hope that will provide him with the confidence that he needs.

Mr Speaker: I appeal to the Secretary of State to look at the House so that we can all hear her answers.

Michael Weir: We welcome the commitment to HS2 and note what the Secretary of State said about the impact on Scotland, but will she now widen the remit of HS2 to allow immediate planning for extension further north and link-up with development in Scotland, rather than waiting the several years that it will take the hybrid Bills to go through this place?

Justine Greening: It is fair to say that our focus must be on making sure that the Y network and, in particular at this point, phase 1 of that network happens. I am happy to discuss with the Scottish Government their proposals and ideas for how we broaden that network further in the future.

Angie Bray: I very much welcome the statement, particularly confirmation that the station at Heathrow will go through in phase 2. Does the Secretary of State agree that when phase 2 is completed and there is a direct link from the north to Heathrow, that should make a significant contribution to reducing the pressure of domestic flights at Heathrow?

Justine Greening: I agree with that. We have estimated that around 4.5 million air flights a year will transfer on to high-speed rail as a result of this.

Stephen McCabe: I welcome the right hon. Lady’s brave decision today. Like others, I am a little worried that if the legislative timetable is too long, the project may lose impetus and she may be a victim of election trimming. Will she reflect on those risks?

Justine Greening: I have, and that is why I am cracking on with it today.

Nadhim Zahawi: Today’s announcement has been welcomed by the business community in my constituency, including the chairman of the Coventry and Warwickshire local enterprise partnership, but many people are rightly concerned about the countryside. Does my right hon. Friend agree that it is vital to safeguard the countryside and its wildlife as far as possible for all the people who are living there today, as well as for those who will be living there tomorrow?

Justine Greening: I thoroughly agree. I have had a clear priority to look at how we can minimise the impact of this project on people, but in addition to that I have been careful to look at how we can minimise the impact more broadly on both the environment and of course wildlife, and I will continue to do that. The environmental impact statement process that we can now begin will enable us to do that in a far more detailed way. That is very welcome.

Stephen Timms: I welcome the statement. Greengauge 21 has pointed out that if some commuter services that currently run into Euston could be diverted on to Crossrail when High Speed 2 opens, that would create new through-services, which would be very welcome, could significantly reduce the demand for extra platform capacity at Euston, addressing one of the problems that has been raised in this exchange, and would also open up the possibility of a much better interconnection between High Speed 1 and High Speed 2 than the single-track proposal that is on the table at present. Is the Secretary of State looking at that idea for improving the position?

Justine Greening: We have reached a conclusion on phase 1, which I have announced, and we have looked at such proposals. Network Rail is now able to look at the possibilities arising from the released capacity on conventional lines. That has the potential to address some of the points that the right hon. Gentleman raised.

Geoffrey Clifton-Brown: I welcome today’s announcement on an important piece of our national infrastructure. As such, will my right hon. Friend consider all of us who represent constituencies west of Heathrow and make sure that the connectivity from the west into the new network is as good as possible?

Justine Greening: Yes, I will. We are always looking at ways to improve that, and I welcome the chance to talk to my hon. Friend about it.

Barry Gardiner: The Secretary of State has rightly spoken of the need to offset biodiversity loss and mitigate environmental impacts on wildlife, but will she go one stage further and take this unique opportunity to look at developing migratory corridors that will give species that need to migrate northwards as a result of climate change the connectivity in the landscape to enable them to do so?

Justine Greening: The hon. Gentleman raises an important point, and I will be keen to look at the environmental opportunities presented by the project as well as the environmental challenges.

Nigel Mills: This will be even more popular in Derbyshire if the trains are built at Bombardier. When will we know the detail of the location of the station for the east midlands and the route for the track, which is of some concern to my constituents?

Justine Greening: My hon. Friend will have been pleased, over Christmas, to see that Bombardier won the contract to produce train carriages for Southern Rail. We will be getting some initial views on the route later this year, and that is when we would like to see regions, areas and communities trying to reach some consensus on where those interim stations should be.

Tom Greatrex: I welcome the statement and the accompanying Command Paper in relation to talk about the foundation for subsequent phases and extensions arising from the Y route. In her discussions with the Scottish Government, will she look specifically at the business case, and start to do so now, so that the vital impetus to ensure that HS2 benefits Scotland is not lost?

Justine Greening: We are getting on with our discussions. The Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning), will be going to Scotland tomorrow, and I have no doubt that those conversations will start right now.

Chris White: Does my right hon. Friend work on trains when she is travelling around the country, and if she does, along with hundreds of thousands of others, does she not believe that that factor undermines a major plank of the business case for HS2?

Justine Greening: No, I do not. The fact the people rightly complain when they get delayed on a train and stuck in traffic shows intuitively that people place a huge value on their time, and rightly so. We use robust methods to value time in the business case, and they are absolutely correct.

Brian H Donohoe: Timetables are important to railways. When does the Secretary of State expect to see the first high-speed train into Glasgow Central station running on high-speed rails?

Justine Greening: In theory it should be in 2026, when the high-speed line from London to Birmingham is complete and trains will continue up the west coast main line, and no doubt arrive in Glasgow. I know that the hon. Gentleman’s underlying question was when the high-speed network will make it up to Scotland, and as I said on a number of occasions during the statement, I am very happy, indeed keen, to talk to the Scottish Government about their proposals for that in the future. In the meantime, the good news today is that we are getting on with phases 1 and 2. That has to happen in order for his desire to be fulfilled as well.

Jeremy Lefroy: I thank the Secretary of State for her statement. The plans published today do not include any stops on the Y between Birmingham and Manchester, whereas there are two between Birmingham and Leeds. Businesses in north Staffordshire believe that a stop is essential to the development of the regional economy. Can she confirm that it is still under serious consideration?

Justine Greening: I will be very happy to talk to my hon. Friend about his desire for high-speed rail in his area, and then we can discuss those precise issues.

Susan Elan Jones: I congratulate the Secretary of State and thank her for her commitment to HS2 today. She will, of course, be aware that there has been a great deal of support from members of the public and from businesses in Wales on this. Can she confirm whether the Secretary of State for Wales, in her capacity as Secretary of State for Wales, made representations in favour of this, thus reflecting widespread opinion in Wales?

Justine Greening: The Secretary of State for Wales did her job both as a Welsh Secretary and as a constituency MP in talking to me about the benefits of the project, and I thoroughly agree with her that we have ended up with the right line, with the right mitigation.

Damian Collins: My constituents in east Kent, who already benefit from High Speed 1, will be pleased to hear that there will be direct through services on High Speed 2 to the north and the midlands. Has the Secretary of State considered the economic benefit to Kent, East Sussex and east London of better connectivity with the major centres of the north and the midlands?

Justine Greening: Part of our business case for phases 1 and 2 is looking at the wider economic impacts. It is always difficult to monetise those properly, but I believe that they will include some of those positive impacts, and that over time we will see the benefit of a larger high-speed network nationally, bringing benefits not only to constituencies like my hon. Friend’s, where the network already exists, but to other cities across the country.

Jonathan Edwards: I would be intrigued to learn how it is cheaper to develop a railway by digging a tunnel. How can the UK Government justify that decision, which it is reported will cost £500 million, made to keep the Secretary of State for Wales in post, while refusing even to electrify the main line to Swansea?

Justine Greening: May I just correct the hon. Gentleman’s facts? Tunnelling under the Chilterns will save between £250 million and £300 million, rather than costing £500 million. I hope that that provides him with some reassurance that this will in fact be less expensive that it would otherwise be.

Greg Mulholland: All of us involved in the cross-party, cross-sector and cross-riding campaign for a high-speed rail line to Yorkshire are absolutely delighted by the announcement. Because it is
	so important that it gets to the northern cities, can the Secretary of State assure us that in the legislation she will ensure not only that the line will be guaranteed to go to Sheffield, Manchester and Leeds, but that the two Ys will be built no more than six years after phase 1, as currently planned?

Justine Greening: My hon. Friend is right to urge me to push on with that, which is precisely what I will do. I do not think that I can add anything to my earlier comments on my desire to provide a concrete assurance that the Y will happen, but I reiterated on many occasions in my statement my intention to see the full Y network built.

Jonathan Reynolds: I commend the Secretary of State for her decision. Many of the arguments for High Speed 2 cited reduced journey times, which are obviously important, but I have always thought that the arguments about capacity are equally compelling, particularly as investing in classic rail services would provide only two thirds of the capacity that we will get with high-speed rail. How great a factor was that in her decision?

Justine Greening: One of the most important parts of the decision was looking at the alternatives to see whether they could answer the critical capacity question that, as the hon. Gentleman points out, we face. High Speed 2 is the best answer to that question. I urge other Members who have asked themselves that question, but who have perhaps not done quite as much research as he has, to look at the Network Rail report published over the weekend, because it gives a compelling and robust assessment of some of the alternatives and sets out precisely why they would not have delivered the capacity that we so badly need.

Mark Menzies: Businesses across Lancashire will welcome today’s announcement on High Speed 2. When will the Secretary of State be in a position to lay before the House details of the region-by-region economic gain that HS2 will bring to the north?

Justine Greening: We have already looked at the wider economic impact, but I will see whether it is possible to break it down by region. There is no doubt that the broad overall economic impact of HS2 will be substantial.

Kelvin Hopkins: HS2 will not resolve the urgent need for additional rail freight capacity. To achieve significant modal shift for freight traffic we need a new route, built to UIC gauge C, enabling continental rail wagons and lorries on trains to be transported up and down Great Britain and to and from the continent. Will the Secretary of State look at the case for a dedicated rail freight route from the channel tunnel to Glasgow, for which a carefully designed scheme is already available?

Justine Greening: The hon. Gentleman is right to raise the critical issue of freight. I visited Felixstowe port earlier last year and talked to people there about the sorts of challenges they face and the investment that
	they feel is needed in the network, and I will continue to look at those opportunities. He emphasises the continued need for investment in the current conventional line while we get on with our proposals on high-speed rail.

Gavin Barwell: I warmly welcome my right hon. Friend’s announcement on what will be a significant improvement in national infrastructure. May I ask her about Old Oak Common in relation to the connectivity to Crossrail and the Great Western line? Would she also look at the possibility of connecting the high-speed line to the West London line so that people living in south London and the south-east can access HS2 without having to use the London underground?

Justine Greening: My hon. Friend raises the right point, which is that the plans for HS2 that we have announced and confirmed today will in future present broader opportunities to us and our transport system. I will be happy to discuss those with him in the coming weeks and years.

Clive Betts: The Secretary of State’s announcement will be warmly welcomed in the Sheffield city region, particularly the fact that consultation on the route north of Birmingham will begin this autumn. However, at that time blight will begin for households and businesses. Will she therefore give an assurance that the decision on the route will be made as quickly as possible afterwards? When will compensation arrangements be in place for those affected?

Justine Greening: What will happen later this year is the start of an informal discussion with stakeholders in that region on where the route might go. The formal consultation is scheduled for 2014, precisely so that we can, I hope, minimise blight. As I think I have said very clearly to the House today, we will consult on a final package of property and blight compensation and mitigation later in the spring, which will help to provide some assurance to the hon. Gentleman’s constituents that there is a structure in place to ensure that there is a package of support for people who are directly affected by High Speed 2 as it goes into phase 2.

John Howell: I welcome my right hon. Friend’s decision and the measures that she has announced, which will benefit the Chilterns as a whole, but will she say a little more about the commitment that she has made about giving the public more opportunities to get involved as the project proceeds?

Justine Greening: Broadly, two things will happen. First, as I have said, we will consult on the compensation and blight package in spring. Secondly, we will set up structured working with local authorities and community groups on the environmental, planning and community challenges, to ensure that we can make the most of HS2 and take advantage of some of the opportunities for the environment as well as mitigating some of the downsides of going ahead with the project.

Stephen Pound: Further to the question from my hon. Friend the Member for Sheffield South East (Mr Betts), commencement is a long way down the line, but the contemporary concern in my constituency is blight and the fear of blight. The right
	hon. Lady has said that discussions on the details of mitigation will take place possibly this year and possibly next year. With respect, that is not good enough for Northolt, Greenford and Perivale. Will she tell me something today so that I can explain to those people that they will have their voices heard, particularly and specifically on mitigation?

Justine Greening: Yes, I can. The hon. Gentleman will obviously be aware of the bored tunnel under Ruislip, which will significantly help his area. I would also direct him to look at the document that we have issued today setting out our review of property issues. It talks in very clear terms about the next steps, and what will happen when.

Karen Lumley: Will the Secretary of State reassure the residents of Redditch that High Speed 2 will come in on budget, and that it will bring massive economic benefits to constituencies in the west midlands?

Justine Greening: I hope that I can provide reassurance. We have certainly developed the calculations on costs in line with Treasury guidance, which is very conservative. Of course I will be aiming, if at all possible, to have the project come in under budget, although I suspect that there will also be others who will have to manage the costs over the coming years.

Phil Wilson: I commend the Secretary of State’s statement this afternoon. Is she aware that the High Speed 2 announcement could bring benefits to the north-east of England almost straight away? Hitachi Rail Europe, which wants to build its train factory in Newton Aycliffe in my constituency, has announced that it will bid for the rolling stock to be made there when the time comes, which could bring jobs to Durham, the Tees valley and the north-east of England.

Justine Greening: The hon. Gentleman points out the very welcome investment from Hitachi in his area. Combined with the unprecedented investment that the Government are making in our railways today and in future, which I have announced today, that bodes well for creating more jobs building rolling stock in the UK.

Stephen Mosley: I warmly welcome my right hon. Friend’s statement today, which will deliver massive long-term benefits for the north of England. However, during the construction phase of High Speed 2, it is likely that there will be significant disturbance to the existing west coast main line, in particular because of work at Euston station. Has she considered how to ensure that existing services are protected during construction?

Justine Greening: We will work in a very detailed fashion to make sure any disruption is minimised. The disruption will be significantly less than the disruption that there would have been if we had had a strategy of upgrades to lines, including the west coast main line.

Angela Smith: The Secretary of State gave a helpful hint earlier, when she said that she was considering covering the whole Y-shaped network in forthcoming hybrid legislation. Will she agree to meet a delegation of MPs from northern
	cities so that we may press the argument for its inclusion, which is amazingly and incredibly important to the whole north of England?

Justine Greening: I shall be happy to meet the hon. Lady. On that agenda, I would also like us to discuss some of the benefits that HS2 can bring to communities such as hers—one that I, of course, know very well.

Stuart Andrew: Coming from Yorkshire, may I enthusiastically welcome the Secretary of State’s announcement? Does she agree that if we are to rebalance the economy from the south-east to the midlands and the north, constituencies such as mine, and the wider city of Leeds, need to become more attractive for business to invest in? Fundamental to that is ensuring that we deal with the overcrowding problems on our existing rail services. HS2 is the solution, and it is good for Britain.

Justine Greening: It certainly is, whether in terms of providing more seats for passengers in the future or relieving the huge pressures on the existing rail network. HS2 is a direct line for growth in our country, and I am absolutely delighted that we have been able to announce today that it is going ahead.

Julie Hilling: I very much welcome the Secretary of State’s announcement, as well as her commitment to the Y network and the ongoing improvement of the classic network. However, the northern hub is essential if we are to ensure connectivity so that local services are not disadvantaged by HS2. Will the Secretary of State commit to the full funding of the full northern hub project?

Justine Greening: We have already announced the electrification of the trans-Pennine railway line, which is a key part of how we can start to deliver some of the northern hub agenda. I am very happy about that, and we are indeed looking at what it means for the rest of the northern hub proposal as part of the HLOS2 review process, which is happening right now.

Marcus Jones: Fast services on the west coast main line to Nuneaton were drastically reduced under the previous Government in 2008, much to the displeasure of many of my constituents. Will my right hon. Friend explain whether HS2 will make the provision of fast services for my constituents better or worse?

Justine Greening: I certainly hope that it will give us the potential to make them better, and Network Rail is looking at precisely what the opportunities for the conventional rail network will be if we have capacity elsewhere via high-speed rail and High Speed 2. The problem we have at the moment is that the more constrained capacity is on the network, the more we have to prioritise where to connect to on the network to maximise passenger benefit, and that has, of course, caused pressure to reduce the network’s connectivity. One of the best things about HS2 is that it starts to open up some real opportunities on the existing network to connect people better with the railway.

Jonathan Ashworth: I welcome the Secretary of State’s statement on high-speed rail. She will presumably agree—certainly with regard to phase 1—that commuters travelling from Leicester train station in my constituency will see no direct advantage, although I appreciate that phase 2 may be different. She will be aware that many of those commuters have been hoping for the electrification of the midland main line. Given her remark that she is ruling out short-term fixes, is she now saying there is no possibility whatever of electrification of the midland main line in the foreseeable future?

Justine Greening: No, I am not. We have the HLOS2 process, by which we can consider all such things. Again, I would encourage the hon. Gentleman to look at the Network Rail report, which is very clear-cut about some of the pressures there will be on the midland main line if we do not go ahead with High-Speed 2.

Graham Evans: I am delighted to welcome the Secretary of State’s statement. This is the right decision for the whole country and will tackle the capacity challenge, create jobs in the midlands and the north and equip our economy for the 21st century. Will my right hon. Friend confirm that High Speed 2 will reduce carbon emissions, as well as switching people from road to rail?

Justine Greening: We hope that it can. It will result, on average, in about 4.5 million short-haul flights a year and about 9 million road journeys a year transferring to high-speed rail. Both those things will be good for the environment.

Sheila Gilmore: Despite warm words from the Secretary of State about Scotland, I remain unclear about whether she is prepared to extend the remit of the HS2 company to include detailed route planning for Scotland. If she is, when will it happen?

Justine Greening: I ask the hon. Lady to give me a chance to get up to Scotland and meet the Scottish Government. I will be happy to meet her and other MPs representing Scottish constituencies to discuss the opportunities for the broader high-speed network. As she demonstrates so clearly, in countries that get on with high-speed rail, once one bit of the line is done there is pressure to do more of it. That is because it is incredibly successful and people can really see the benefits.

Esther McVey: Having worked closely with the north west business leadership team, I would like to welcome High Speed 2 on its behalf, given the arguments that have been made over many years about unlocking the potential of businesses in the north, assisting the rebalancing of the economy, and proper connectivity between the north and south. This is a national scheme in two phases but will the Secretary of State clarify the benefit to the north of England from phase 1?

Justine Greening: The principal benefit will be not just the high-speed link between London and Birmingham but the fact that it could connect to the west coast main line, which means that people will benefit from shorter
	journey times that persist as they continue their journey further north. That is really good news for people in that area.

Kevin Brennan: Did I hear the Secretary of State aright? Did she say that the Chilterns tunnel would cost £250 million to £300 million less than the cost would be without it? That raises the question why, if it is cheaper to tunnel, she is not burying the entire line. Will she please give us the true figure for building the tunnel?

Justine Greening: It will cost £250 million to £300 million less. The hon. Gentleman asked why we cannot tunnel the whole way under the Chilterns. Of course that is predominantly an engineering question concerning the amounts of spoil and the geographical nature of the land that we are going through. It is quite a complex question but the brief answer is yes, it really is more cost-effective.

John Stevenson: The Secretary of State said that the hybrid Bill could include phase 2. Would it not be sensible, if we have a hybrid Bill before us, to take the route all the way to Glasgow and Edinburgh, which would reassure those of us who live beyond Manchester and Leeds that there will be a high-speed network there at some point in the future?

Justine Greening: The short answer is no. If we did that, we would have to go through the laborious process that we had to go through to sort out phase 1 of the route. It is better to get on with that and then initiate the process of finalising the route as it goes further north.

Graeme Morrice: The disadvantage of being one of the last Opposition Members to be called is that people have already asked my question. But I will give it another go. I certainly broadly welcome the Secretary of State’s statement and recognise her comments about the project’s economic benefits for the entire United Kingdom—so long as the kingdom remains united, of course. I noted her reference to phases 1 and 2 of the project. Obviously, there was no specific mention of a phase 3 and the line’s extension to Edinburgh and Glasgow in Scotland, although I accept the Government’s aspirations in that regard. I also noted that on several occasions she told hon. Members that there would be discussions with the Scottish Government and Scottish MPs. I believe that such discussions, being long term and prolonged, should be structured. Will she publish a timetable for those discussions?

Justine Greening: I will consider how we can take forward discussions with the Scottish Government. Perhaps I can set out a few more details for the House in the near future.

Jason McCartney: HS2 has the potential to tear down the north-south divide. With that in mind, does my right hon. Friend agree that support for, and confidence in, the project in the north of England would be massively enhanced if the building of the Manchester and Leeds legs began as soon as possible, at the same time as the London to Birmingham leg?

Justine Greening: We cannot do that, but for all the right reasons—because we have to go through the rigorous process of ensuring that we have got the line of route right. However, I can assure my hon. Friend that we will go through that process as fast as we can—but get it right—and then crack on with the rest of the Y-shaped network.

Guy Opperman: In the north-east and Newcastle this decision is welcomed, both by business leaders and because it is good for the economy. Can the Secretary of State identify to what extent HS2 will free up existing rail capacity on lines to and from the north-east?

Justine Greening: We believe that it will have the potential to free up significant capacity. As for the potential that this will create for the conventional rail network on new routes and new station stops, Network Rail has been asked to do that work and will report to me later in the year. I look forward to reading that work with interest, and to sharing it with the House.

Christopher Pincher: My right hon. Friend will be aware that many people believe the present exceptional hardship scheme to be inconsistent and unfair. Can she confirm that her proposed refreshed hardship scheme will be consistent and will ensure that anybody affected by blight who wishes to move will be properly compensated? Those people should not be penalised for living in the wrong place at the wrong time.

Justine Greening: I have been keen to look at what we can do to improve the effectiveness of the hardship scheme. My hon. Friend will know that we have received around 240 applications from people. With the finalised line of route, some of those will obviously be from people in areas that will now see real mitigation. The point of the consultation, which will happen in the spring, is to ensure that we finalise those details. I very much urge him and his constituents to respond to the consultation, so that we can reach a final version of the scheme that delivers what we want, which is a fair deal for the people affected.

Philip Hollobone: In commissioning HS2, will my right hon. Friend avoid the mistakes of the previous Government in drawing up the contract tender specifications for the last Bombardier contract, and do all in her power to ensure that as much of the materials, construction work and rolling stock for High Speed 2 as possible is provided by British firms, providing British jobs for British workers?

Justine Greening: This Government have a laser-like focus on ensuring that our country becomes more competitive and creates more jobs. We are now back in the top 10 nations in the World Economic Forum ranking for the first time in many, many years. I believe that our companies are well placed to take advantage of the investment that we are making, and that is certainly what I want to see happen.

Kris Hopkins: I welcome this important announcement. Will my right hon. Friend ensure that high-quality engineering and construction companies in the north of England have a fair chance of bidding for some of the £33 million, and that it does not become just an opportunity to refill southern coffers?

Justine Greening: I have no doubt that companies in my hon. Friend’s part of the country will be extremely well placed to bid as well as anybody else, in any other part of the country, to take advantage of some of the economic benefits coming from this project.

Ben Wallace: I think that I am on the slow line, Mr Speaker. I warmly welcome my right hon. Friend’s announcement today about High Speed 2. As a good northern girl, she will know that the north of England does not start and stop at Leeds and Manchester. On the route map published today, it seems that High Speed 2 on the north-west line extends further north than Manchester, perhaps to what looks like Preston. Will she give serious consideration to ensuring that Preston is included in phase 2, so that Lancashire and one of the hubs of British manufacturing get direct access to the south?

Justine Greening: I am delighted to tell my hon. Friend that places such as Preston will gain from phase 1, in terms of connectivity between the west coast main line and HS2. I am as passionate as he is about ensuring that his area has excellent railway links, and we are looking at developing the HLOS2 proposal for shorter and medium-term funding in our railways. I have no doubt that he will continue to represent his constituents’ needs to us as powerfully as he just did, and I will continue to pay very close attention to them.

Mr Speaker: Seventy-four hon. Members have been able to question the Secretary of State in 59 minutes of exclusively Back-Bench time, so I thank colleagues for the succinctness of their questions, and the Secretary of State for the succinctness of her answers.

Scotland’s Constitutional Future

Michael Moore: With permission, Mr. Speaker, I would like to make a statement on Scotland’s constitutional future in the United Kingdom.
	In May 2011, the Scottish National party won a significant electoral victory—a victory that this Government have openly acknowledged. The SNP has consistently campaigned for Scottish independence, and its 2011 manifesto included a pledge to hold an independence referendum. As a Scot, I think that it is vital that the Scottish people make a clear decision about our future within the United Kingdom: a decision made in Scotland, by the people of Scotland. At present, however, there is a lack of clarity about the referendum, its outcome, and what the implications of that outcome would be, all of which creates economic uncertainty. That is bad for jobs and investment.
	Since last year’s election, we have been asking the Scottish Government to set out their plans for a referendum, but so far they have not done so. In particular, they have not said anything more about their legal power to deliver a referendum. This is not an issue that can be ducked. To legislate for a referendum on independence, the Scottish Parliament must have the legal power. It is this Government’s clear view that the Scottish Parliament does not have that legal power.
	Scotland’s future within the UK will be the most important decision we, as Scots, take in our lifetime. It is essential that the referendum is legal, fair and decisive. As a Government, we have been clear since May 2011 that we will not stand in the way of a referendum on independence, but neither will we stand on the sidelines and let uncertainty continue. Any referendum must let all of us in Scotland determine our future clearly and decide whether to stay part of the longest, most successful partnership of nations in history. That is why we are publishing a consultation to seek views on how to deliver a legal, fair and decisive referendum. For a referendum to take place, legislation is required. That will ensure that any referendum, on any issue, is subject to detailed consideration and debate, and to clear and consistent regulation.
	In 2010, the Scottish Government published plans to legislate for a referendum on independence. We have considered those plans carefully against the devolution settlement in Scotland as set out in the Scotland Act 1998. The 1998 Act is clear: the Scottish Parliament cannot legislate on matters reserved to this Parliament. Among the issues that are reserved is the constitution, including
	“the Union of the Kingdoms of Scotland and England”.
	Any Act of the Scottish Parliament that “relates to” a reserved matter is quite simply “not law”. Whether or not a Bill “relates to” a reserved matter depends on its purpose and effect. We are clear that the Scottish Government’s purpose in bringing forward a referendum is to secure independence. Their intended effect is to secure a mandate for negotiating this. Both purpose and effect relate directly to the reserved matter of the Union. Any distinction between a binding or advisory referendum is artificial. As the law stands, an independence referendum Bill is outside the competence of the Scottish Parliament. Such a Bill could be challenged in court, and it is our view that the Scottish Government would lose.
	The consultation paper that I am publishing today sets out different ways to deliver a legal, fair and decisive referendum. It explains how the powers for a referendum could be devolved under the section 30 order-making provisions in the Scotland Act 1998, which is our preferred approach. It also invites views on devolving the powers using other legislation, including the current Scotland Bill, and seeks opinions on the possibility of running the referendum directly.
	Given the clear legal problem that exists, we want to work with the Scottish Government to provide the answer. This is not about the mandates of Scotland’s two Governments, or about who calls the shots. It is about empowering the people of Scotland to participate in a legal referendum. That means that the UK Government are willing to give the Scottish Parliament the powers to hold a referendum, which it cannot otherwise do legally. As well as being legal, however, a referendum must be fair and decisive. For those reasons, the rules of the referendum must be demonstrably above board. The referendum should be overseen by those who have neutrality and the proven expertise to inspire confidence in the fairness of the process, such as the Electoral Commission.
	These issues are not for politicians alone to consider. That is why the consultation process that starts today will let people express their views on when a referendum should be held, what question should be asked, who should be entitled to vote and how the campaign should be run. It will be open to all people in Scotland—and, indeed, outwith Scotland—to make their views clear, rather than rely on the opinions of politicians. It is in everyone’s interests that the two Governments take on board the needs of Scotland and the opinions of its people, work together, and deliver the legal, fair and decisive referendum that is in our common interests.
	The Government believe passionately in the United Kingdom. For over 300 years our country has brought people together in the most successful multi-national state the world has known. This Government are clear that independence is not in the interests of Scotland. The United Kingdom brings strength to Scotland; Scotland brings strength to the United Kingdom. We recognise that this is not a view shared by all, but politicians from both sides of the debate owe it to everyone in Scotland to ensure that the referendum is delivered in a legal, fair and decisive way.
	The future of Scotland must not be worked out in secret, behind closed doors, nor determined by wrangling in the courts. It is my task to ensure that this referendum is made in Scotland by the people of Scotland for the future of Scotland. I commend this statement to the House.

Margaret Curran: I thank the Secretary of State for sight of the statement before its announcement this afternoon. As a consequence of the result of the Scottish elections in May, we accept that the Scottish National party has a clear mandate to ask the people of Scotland whether they want to remain part of the United Kingdom. There is absolutely no doubt that this referendum will take place; what all the political parties must now do is work together to make sure that the referendum is fair, legal and commands the complete authority of the Scottish people.
	In the light of the Secretary of State’s statement, we have some further questions and concerns that I hope he will address in his response. I begin by asking the
	Secretary of State how he plans to take forward his proposals and his plans for consultation on the section 30 order.
	Secondly, I understand that without publishing any of their own legal advice, the Scottish Government are contesting the authority of the legal advice held by the Secretary of State. What assurances can he give the Scottish people that the advice he holds rests on a sound foundation—a foundation that is robust and authoritative on this issue? To ensure maximum transparency, does he plan to publish his legal advice, and would he recommend that the Scottish Government do the same?
	Thirdly, Scottish Labour is clear that any question on separation must be a straight yes or no choice. We therefore welcome yesterday’s acknowledgement by the Deputy First Minister of the Scottish Government that this is also the preference of the Scottish National party. Will the Secretary of State confirm that this is the position of the coalition parties, too? If so, it is important to recognise that, in respect of Scotland, all four major political parties are in agreement that there should be a straight choice of a yes-no referendum. That is a highly significant development.
	Fourthly, will the Secretary of State confirm with absolutely clarity today whether the UK Government support the involvement of the Electoral Commission in the conduct of the referendum? The Electoral Commission has overseen referendums in Wales and the rest of the United Kingdom this very year, and it has the highest level of confidence and respect in overseeing the referendum as a non-partisan arbiter. We are of the opinion that it is the body best placed to oversee the referendum. Does the Secretary of State share that view?
	Which Minister will lead the consultation? Will it be the Secretary of State himself, or will it perhaps be the Chancellor? The United Kingdom Government appear to have sent out the wrong signal by allowing the Chancellor, rather than the Secretary of State for Scotland, to take the lead on a vital Scottish issue in the Cabinet.
	As the First Minister asserted last May, the sooner the vote on the future of Scotland is held, the better. Scotland’s economy is flatlining. One in four young Scottish men is out of work. We are told that Scotland now faces record levels of child and family poverty. What we cannot afford to do is spend the next four years obsessing about the process of a referendum. Now is the time for parties to work together, get on with the debate, and get on with deciding where Scotland’s best future lies.
	The Scottish people face a momentous decision in the referendum. What Labour will not do is sit back and support a process that turns into a petty fight between the two elements that Scotland rejects—separation and the Tories. Scotland deserves better than politicians bickering about the process. We must move as quickly as possible to a debate of substance that puts Scotland’s people and Scottish interests first.

Michael Moore: I entirely agree with what the hon. Lady has just said about the need for us get on with the debate, and to ensure that the Scottish people and Scottish interests, not the interests of politicians in different political parties, are at the heart of it.
	I am delighted to confirm that—as the hon. Lady will see if she reads the consultation paper, and as is
	clear from the fact that I made the statement today—I will lead for the Government, working with all my colleagues.
	As I acknowledged in my statement, the Scottish National party secured an important victory in the elections last year. It had set out its clear intention of holding a referendum, but what was not so clear was how it would do that. As I have said, we believe the legal position to be that the Scottish Parliament does not have the power to conduct any kind of referendum, and it is therefore important for us to work with the Scottish Government to ensure that we can get on with this historic decision.
	The hon. Lady asked how we would consult. The consultation document offers people throughout Scotland the opportunity to write and involve themselves in the process. I will of course be going out and about in Scotland myself, and I am sure that many others will also involve themselves in the debate. It is important that everyone in Scotland is able to feel part of the process.
	The hon. Lady will be aware of the ministerial code and the convention followed by successive Governments that legal advice is neither acknowledged nor published. However, I ask her to look carefully at the consultation document and to note the authority that we are bringing to bear, namely sections 29 and 30 and, in particular, schedule 5 of the Scotland Act. I believe that careful examination of those documents will lead to only one clear conclusion: that there is no legal authority for any referendum. We must ensure that that issue is resolved.
	The hon. Lady asked whether I, like her, support a simple, straightforward yes-no question on Scotland’s place in the United Kingdom. That is indeed what we are recommending. As for the issue of oversight, I think it entirely fair and reasonable for the process of a referendum to be overseen by a body that has widespread experience, is neutral, and is seen to be above and beyond the fray. The Electoral Commission seems to me to fit the bill, but I look forward to hearing the reactions of others during the consultation.

John Redwood: What do the Government propose should happen to the shared debts and the shared membership of the European Union were Scotland to leave the Union?

Michael Moore: The right hon. Gentleman asks an important question. I am sure that it is one of many that will be at the heart of the debate about Scotland’s future when we come to the referendum itself, but for now I want to ensure that we can get on with the proper substantive debate.

Jack Straw: May I pick up on the important point made by the right hon. Member for Wokingham (Mr Redwood)? During the referendum campaign, there will be claim and counter-claim about the adverse or beneficial effects for the people of Scotland, and by extension for the people of the other parts of the United Kingdom, of separation or retention of the Union. Will the Secretary of State consider, in consultation with all the parties, drawing on the experience of the Office for National Statistics, the Statistics Authority and the Office for Budget Responsibility and deciding whether a body should be set up to provide authoritative
	factual information about the consequences of separation and union, so that when there is an argument it is at least an argument on a common currency?

Michael Moore: The currency question will, of course, also be an issue in the referendum debate. The right hon. Gentleman draws on a lot of experience of the relevant legislation, and he makes an important point. When we hold the substantive debate—which must happen sooner rather than later—it is important that we can turn to agreed sources of information. We can consider that issue at a later date, but I accept the point the right hon. Gentleman makes.

Menzies Campbell: I am well aware of the convention that Governments do not publish legal advice, but, as my right hon. Friend has pointed out, this is a decision that can almost be described as unique because it would bring to an end hundreds of years of history. May I therefore urge him to reconsider whether the advice received by the Government should be published so as to achieve the clarity that the right hon. Member for Blackburn (Mr Straw) spoke about in relation to statistics?
	I welcome today’s announcement, especially because political, economic and social uncertainty for the next two years would be deeply damaging to the people of Scotland. Does my right hon. Friend join me in wondering why those who are so confident of the case for independence are so unwilling to countenance a referendum now? Could it be that the bravehearts are no longer quite so brave as before?

Michael Moore: My right hon. and learned Friend makes an important point: over the past few months they have been strangely quiet about the need to get on with this referendum on an issue for which they have campaigned over many generations.
	I am grateful to my right hon. and learned Friend for welcoming today’s announcement. In respect of the legal advice, may I advise him to look carefully at the consultation paper and the clear view about the authority in the Scotland Act? I am absolutely certain that that opinion is right, and as a result we need to ensure that the Scottish Parliament has the authority to pass a referendum Bill and get on with addressing this most important decision.

Angus Robertson: I am grateful to the Secretary of State for his timeous sharing of the statement in advance of his making it today.
	Last year, the Scottish National party won an historic landslide victory on a platform to hold a Scottish independence referendum in the second half of the Scottish Parliament. The Conservative party, the Liberal Democrats and the Labour party opposed an independence referendum, and each one of those parties lost heavily in the election, so why are this Westminster Government trying to dictate terms about the referendum to the democratically elected Scottish Government, who have a mandate on this issue? Specifically, why are the Westminster Government seeking to dictate the date of the referendum and the questions on the ballot paper, and why are they seeking to exclude 16 and 17-year-olds from this important and historic referendum?

Michael Moore: I do not know how often I have to acknowledge the SNP’s victory of last year before the hon. Gentleman hears me say it, but I am happy to repeat that I recognise its victory of last year. I am surprised that he has such a problem with the law, however, because I am sure that an independent Scotland would want to be governed under the rule of law. Therefore, I think it is in all our interests to ensure that the legal basis of any referendum is clear. I am saying to him that it is not there—it is not possible to have a legal referendum. It does not matter whether it is “advisory”, “legally binding” or whatever one calls it: a referendum has to be legal, and the authority is not there. What I am offering the hon. Gentleman, the First Minister and all his party is a way by which all of us in Scotland can get on with this decision without needing to have it made by the courts, rather than by people going to the ballot box.
	The hon. Gentleman referred to the terms on which we might do this. I repeat: we are consulting. We are asking people across Scotland—and those elsewhere who may have an opinion—to tell us what they think of our proposals. We want to do this together, between the two Governments, and I hope he will encourage his colleagues there to get alongside us and work with us.
	As far as the date is concerned, there is no date in the consultation paper and the draft section 30 order that we are publishing. Regarding the ballot paper, I heard the Deputy First Minister say yesterday that she preferred having a single question, so it is quite useful to get on and do what she, as well as the rest of us, wants to do.
	On the franchise, we are suggesting that the same franchise that was the right basis on which the First Minister and all his colleagues in the Scottish Parliament were elected should be used to determine this historic decision. As far as 16 and 17-year-olds participating is concerned, there is an entirely fair debate about their role in the electoral system generally, but it should not be focused around a single electoral event to suit one party or another. Let us just get on with the debate on the fairest of terms; that is what we are offering.

Bernard Jenkin: I welcome my right hon. Friend’s statement, simply because it is high time that the debate about Scottish nationalism that has been raging in Scotland should be debated here in Westminster, too. However, does he agree that there can be no question of holding a referendum that is legal, fair and decisive unless the proposal on the ballot paper is absolutely clear? Generally, I have to say I favour post-legislative referendums.

Michael Moore: It is important that we have a legal referendum that is conducted fairly, and that is decisive. I would like to see it sooner, rather than later. It is damaging to Scotland and its economy, affecting jobs and investment, if we simply have a long delay. I want to ensure that we have a proper debate about when that should be, and in this consultation we set out the way we can sort the date of the referendum, by agreement.

Ann McKechin: There has already been a great deal of noise as a result of this afternoon’s statement, but it is very clear that the people of Scotland will not take to people playing games with their constitutional future. They will expect both
	Administrations to work together to find a solution to the problem that the Secretary of State has indicated today. Will he provide us with more information about how he will consult and negotiate with the Scottish Government? Will this matter be referred to the joint ministerial council and, if required, be subject to its dispute procedure?

Michael Moore: I am grateful to the hon. Lady for her welcome for this. I absolutely agree that people in Scotland will not thank any of us, from any political party—whether we were elected in Scotland to serve here in the House of Commons, or to serve in the Scottish Parliament—playing politics with this most important process, leading to the most important decision we will ever take as a country. I therefore agree with her that it is important, as I have set out in my statement today and as we say in the consultation paper, that the two Governments work together. I spoke earlier this afternoon to the First Minister and asked him to consider carefully what is in the consultation paper. I look forward to meeting him early on to discuss it further.

Mark Lancaster: Given the economic implications of an independent Scotland for my constituents, when will the English finally get a say on the future of the Union?

Michael Moore: I have to say to my hon. Friend that it is important that the people of Scotland decide their place in the United Kingdom. I am confident that when they do so they will vote to stay within the United Kingdom.

Michael Connarty: May I commend the Secretary of State for the balance with which he has approached this, unlike the leader of the sulking six from the SNP on my left? It is very important that we get it clear that this is not the end of the debate about the powers for Scotland; this is only about the referendum on being in or out, which I happen to think is 13 years too late, as it should have been on the ballot paper in the first devolution referendum. Is it clear that we can continue with the debate, for some of us aspire to give more powers to Scotland within the United Kingdom?

Michael Moore: I absolutely agree that there is a legitimate debate to be had about the powers that Scotland has within the United Kingdom. We have spent a long time on this in this House and their lordships will now consider the Scotland Bill, which will significantly enhance the powers of the Scottish Parliament, creating much greater financial accountability and giving it much greater economic powers. I believe that the debate on devolution will continue; all of our parties, be it the Labour party, the two parties in the coalition or the SNP, will continue to debate it. However, when we have extended the powers of the Scottish Parliament it has always been on the basis of a vigorous debate, where parties set out their stalls, there is a coming together as we develop consensus, as we did in the constitutional convention and in the Calman commission, and then legislation based on that consensus. That offers the best model for giving further powers to the Scottish Parliament, but we now have huge uncertainty because of this prospect of an independence referendum. I want to get rid of the uncertainty. Let us get on with the debate about Scotland’s place in the United Kingdom.

Malcolm Bruce: Further to that point, does my right hon. Friend accept that the dynamic of transferring power from Scotland to England is something for which our party, the Liberal Democrats, has fought for decades and has delivered for Scotland, that that process can continue only within the dynamics of the United Kingdom and that it should not be used to confuse a question about whether the people of Scotland can decide whether to stay in the United Kingdom? Does he welcome, as I do, the indication from the SNP that finally it will stop confusing the electorate of Scotland and give us a straight question: are we going to stay in the UK or not?

Michael Moore: I absolutely agree with my right hon. Friend. Various suggestions about “devo max” have been thrown around without any definition of what it might be and nobody has been willing to stand up and say that it is actually what they want to put forward themselves. Of course I agree with him that the Liberal Democrats have proudly proposed ways to modernise the United Kingdom constitution, and all parties in this House will continue to do that. What matters for now is that we get on and have a clear and decisive decision about our future, and I welcome the Deputy First Minister’s comments yesterday.

Anas Sarwar: I broadly welcome the Secretary of State’s statement. Clearly the SNP won a mandate for a referendum, but now that it has won that mandate it is no longer the SNP’s or Alex Salmond’s referendum, but Scotland’s referendum, because Scotland’s political future is way more important that any political party or individual politician. So does the Secretary of State agree that all political parties, and civic society, must come together in the best interests of the people of Scotland and decide when that referendum should take place?

Michael Moore: First, may I congratulate the hon. Gentleman on his new role within the Scottish Labour party? I am sure that he will be travelling the length and breadth of the country to make the case that he was just making, among other things. As for his central point, I agree that it is important that all parties, and those of none, get involved in this debate, so that all the people of Scotland are engaged in resolving the process and then getting on with the real debate.

Eleanor Laing: Given the astounding arrogance of the SNP in refusing to acknowledge that the Scottish Government simply do not have the legal power to hold a referendum, is the Secretary of State aware that most people, in all parts of this United Kingdom, welcome the fact that he and the Prime Minister have taken the initiative to allow a referendum and let the voice of the Scottish people be heard—not at some historically sentimental point in the future but as soon as the consultation is cancelled—because Scotland and the UK need clarity and certainty now?

Michael Moore: My hon. Friend expresses her disappointment in her usual characteristic style. I, too, hope that the Scottish National party and the Scottish Government will engage constructively and recognise the fact that it is in the interests of people across Scotland that the two Governments work together, get rid of this legal problem and get on with having the referendum on Scotland’s place in the United Kingdom.

Pete Wishart: Will the Secretary of State please pass on our most sincere and deepest gratitude to his right hon. Friend the Prime Minister, because his clumsy and inappropriate steps into the constitutional question have led to thousands of people giving their support to the SNP and the independence cause? There are lots of the Secretary of State’s friends on the Front Bench and lots of his Tory friends on the Back Benches—will he encourage them to come to Scotland? The yes to independence cause needs to hear from the Conservatives.

Michael Moore: There was me hoping that the new year would bring a generous new spirit from the hon. Gentleman but, as ever, I am to be disappointed. I love the fact that he wants to get on with the debate—that would make a refreshing change from where the SNP has been for the past seven months.

Mark Menzies: As the Secretary of State will no doubt be aware, a number of respected economic institutions, including Citigroup, have highlighted that the prolonged uncertainty over Scotland’s future is costing investment and, ultimately, jobs in Scotland. When the Secretary of State next meets the First Minister of Scotland, will he ask him what he is feart of in putting the decision in front of the people of Scotland now?

Michael Moore: I might put it slightly differently. I have already suggested to the First Minister—and I intend to continue this discussion—that whatever our differences about the future of Scotland, it is important that we have a proper debate. I believe Scotland is far stronger as part of the United Kingdom and that the United Kingdom is much the stronger for having Scotland as part of it, whether we think about the economy, our defence, our welfare system and our international clout as Scots within the United Kingdom. I hope that we will get on with that debate, but in the meantime let us get a legal, fair and decisive referendum in progress.

Anne McGuire: Over the past 30 or so years, the one constant in constitutional development in Scotland has been the fact that the Scottish National party has held to the position that its only position is independence for Scotland. Does the Secretary of State agree that it is faintly surreal that now that the Administration in Edinburgh have been offered the opportunity to have a legal basis on which to hold a referendum that might give them their life’s ambition, they now appear to be rejecting it? Is that not an utterly bizarre position for a party that has not participated in the constitutional development of Scotland over the past 30 years?

Michael Moore: The right hon. Lady makes an important point. In all the discussions over many decades about enhancing Scotland’s powers within the United Kingdom, the SNP has set its face against being part of that process. Occasionally, late in the day, it has joined in, but it has mostly turned its back. That is one thing, but to turn its back on a process that would enable a referendum on its life cause and its entire mission in politics is very odd indeed. I hope that when SNP members reflect carefully on the proposition, they will see that it is very reasonable and sets out a fair basis on
	which we can get on with the referendum and ensure that all people across Scotland can make this most historic of decisions. I believe that when they do, they will decide to stay within the United Kingdom.

William Cash: Given that Scotland is in the European Union by virtue of a United Kingdom treaty as implemented by the Westminster European Communities Act 1972, does the Secretary of State accept that if there were to be an independence yes vote, that would require a referendum of the United Kingdom as a whole?

Michael Moore: Until almost to the end of that question, I thought that for once I might be in agreement with my hon. Friend on a matter to do with Europe. He is right to raise the issue of Europe because Scotland’s membership of the European Union, were we to become an independent country, could not be taken for granted. There would have to be a process for getting into the EU, which is vital for our economy. On that basis, I hope we will find common cause.

Brian H Donohoe: I seek an assurance from the Secretary of State regarding the uncertainties that arise by virtue of the time being taken to get to the point where we have a referendum, which are very damaging for inward investment possibilities. Right now I am trying to get inward investment of some size into my constituency, but it is highly probable that as a consequence of all this the high levels of unemployment in my constituency will remain. Can he assure me that this process will take place sooner rather than later?

Michael Moore: The hon. Gentleman makes a really important point about his constituency. I am aware that huge decisions are being contemplated not just for his part of Ayrshire but for all parts of Scotland, and investors do not like uncertainty. We have seen the Citigroup report and the observations of the CBI and the Institution of Mechanical Engineers. It is bad for Scotland and for the UK to have this uncertainty. I want to see the referendum sooner rather than later and we will do everything in our power to ensure that we can do that.

Anne Main: I am really pleased that my right hon. Friend the Prime Minister has grasped this particular thistle. If there is an intention to build HW2, or Hadrian’s Wall 2, surely we need to know because many large projects will stop short of Scotland should the Scots not wish to be part of the Union.

Michael Moore: I do not know how many questions the Secretary of State for Transport took on High Speed 2, but that was a clever and ingenious further question. My hon. Friend is entirely right to highlight that for High Speed 2 to get to Scotland, everybody would need to work together, but with an independent Scotland who knows what they might think of that. Let us not forget that it is not just High Speed 2 that is relevant. Lots of defence projects in Scotland are hugely dependent and are part of the Scottish economy, whether they are on the Clyde or in Fife. For many reasons I think that Scotland should continue to be within the UK.

Ian Lucas: Is it the UK Government’s position that the referendum should take place within 18 months of today?

Michael Moore: No. If the hon. Gentleman looks at the consultation paper, he will see that no date was set in the consultation. I certainly believe it should be sooner rather than later and I hope to persuade the Scottish Government and people across Scotland that we should have it as soon as possible. However, 18 months is not the position of the Government and is not in the consultation document.

Alan Reid: I welcome the statement. The Electoral Commission is independent and is the only body with the expertise to oversee this referendum. Does my right hon. Friend agree that it would be an outrage if the referendum proceeded as per the SNP’s draft Bill whereby it would be overseen by a body that would not be independent of the Scottish Government? The SNP has a mandate to hold a referendum not to rig a referendum.

Michael Moore: I absolutely agree that it is vital that people can have confidence in the referendum process, that it has a legal basis, that it is fair and that it will get a clear, decisive outcome. The role of a body such as the Electoral Commission will be vital because only through its neutrality, independence and experience can we get the necessary confidence so that the process and rules are not an issue. I hope that as we discuss and debate this issue across Scotland people will agree that the commission is the right body to oversee the referendum.

Eilidh Whiteford: The Secretary of State has already responded to a question this afternoon about the eligibility of 16 and 17-year-olds to vote in the referendum. I have only had a chance to have a fairly cursory look at the draft order attached to his consultation paper, but perhaps he can clarify whether it will be the case that European citizens living in Scotland will be eligible to vote in a referendum but 16 and 17-year-olds will not. I understand the pressures of government, but will he support his own party’s policy—it has been a long-standing proponent of 16 and 17-year-olds having the vote—and support the rights of 16 and 17-year-olds to vote?

Michael Moore: What we are proposing is the same franchise as was good enough for the First Minister and every MSP in the Scottish Parliament. I find it slightly strange that people would argue that was not somehow a legitimate franchise on which to be elected. As to my own party’s position, I was clear about that earlier on, but I also made the point—I hope the hon. Lady would accept this—that we can argue about the role of 16 and 17-year-olds in the democratic process legitimately for all elections and all referendums and electoral events; to pick it out on one moment and to apply it in these particular circumstances would, I think, be wrong. But let us have the debate; let us see what people across Scotland believe.

Mr Speaker: Seeking now single supplementary questions of stunning succinctness, my eyes look no further than Dr Julian Lewis.

Julian Lewis: I knew that would be the case. Does the Secretary of State believe that there is any danger of the SNP boycotting a legitimate referendum, and if so, what would be the outcome if the vote were in favour of remaining in the United Kingdom?

Michael Moore: The hon. Gentleman invites me to consider a hypothetical question, which I do not believe will be the reality. I think it is important—and I believe it would be very strange if the Scottish Government did not—that they engage in the process of discussing this and that they consider the aspects that we are putting forward in the consultation today about providing a legal basis for a referendum and having a fair process and a decisive outcome. I think that that is important, and it would seem very strange if the Scottish Government were to turn round and say they did not want to be part of that process.

Jamie Reed: Deciding about independence is, of course, the sovereign right of the Scottish people and has consequences for the rest of the citizens of the United Kingdom. Will the Secretary of State raise with the Scottish Government the precise date upon which the radioactive materials from Scotland stored in my constituency will be returned to Scotland in the event of independence? [Interruption.]

Michael Moore: A colleague says from a sedentary position that that is a toxic question. The hon. Gentleman raises one of many issues that we have had sight of this afternoon that perhaps need to be debated when we get on to the referendum. What I am trying to do is make sure that, reasonably and quickly, we get on to that very referendum.

Louise Mensch: Corby is the fastest-growing town in England and it boasts one of the largest concentrations of people of Scottish heritage and descent south of the border. I am grateful to my right hon. Friend for saying that people outwith Scotland will be consulted during the consultation, but will he assure me that Scots who live outside of Scotland will get the chance to have their voices heard?

Michael Moore: We will not restrict this consultation to people who consider themselves Scots. Wherever they might live—in Monaco or elsewhere—they will be entitled to take part in this consultation. When it comes to the vote, I think that, following internationally agreed precedents, it would be important that it is the people in Scotland who make that decision.

Lindsay Roy: What approaches has the Secretary of State made so far to discuss referendum issues with the Scottish Government, and what has been their response?

Michael Moore: As I mentioned, I spoke to the First Minister earlier this afternoon, and I hope we will be able to meet soon to discuss the proposals that we have set out in the consultation. We have, of course, for some time been discussing with colleagues in the Scottish Government when they were going to bring forward their own proposals on a referendum. None has been
	forthcoming, although I hear that today they might be hurrying that up. We have provided the basis for a discussion, and I hope the two Governments can work well together for the people of Scotland.

John Thurso: My right hon. Friend and a number of other hon. Members have referred to the uncertainty, particularly over jobs and investment. Can I tell my right hon. Friend that mature opinion in the far north, whether it be in favour of the United Kingdom or in favour of independence, recognises that uncertainty and wishes to see it resolved. Will he therefore ensure that his consultation goes to those of mature political opinion throughout Scotland and ignores the bleatings of those in the nationalist playpen opposite?

Michael Moore: I think everybody in Scotland, whatever their temperament, will be welcomed to be part of the consultation, but I agree with my hon. Friend that many from both sides of the debate want the clarity and the legal certainty that we are offering and to get on with the debate—which, after all, has been the reason the SNP has existed for decades. I still am not sure why it is resisting a way forward. I hope that when we discuss the detail, it will agree with us and we will resolve this and get on and have the referendum.

Ian Paisley Jnr: I welcome the forthright and determined approach that the Government are taking to ensure that the most important constitutional issue to affect our nation is being taken by the scruff of the neck, quite frankly, and driven by those on the Front Bench. Does the Minister accept that uncertainty about the Union in Northern Ireland caused decades of economic hardship, and that the sooner we get this matter resolved for the rest of the kingdom, the better; and that it is absolutely essential that the Government harness all the support from across the House—on the Opposition Benches as well as the Government Benches—and from our colleagues in Scotland to ensure that, together, we maintain the Union?

Michael Moore: May I, with all due deference to the hon. Gentleman, say that I would not, for very obvious reasons, draw a comparison necessarily between the experience in Northern Ireland and the really sensitive challenges that Northern Ireland has faced over a very long period and the experience in Scotland and the rest of the United Kingdom. Where I would agree with the hon. Gentleman is that uncertainty is bad for business; it is bad for Scots and others in the UK planning their lives and their future. I want to get that uncertainty resolved and get on with the actual referendum, during which I am confident Scotland will vote to continue to be part of the United Kingdom.

Several hon. Members: rose —

Mr Speaker: Order. I am keen to accommodate the interest of colleagues, as always, but time is pressing and we do have a Second Reading of an important Bill, so I appeal again for brevity from Back and Front Benchers alike.

James Clappison: Can my right hon. Friend confirm that the UK opt-out from the single currency is an opt-out for the UK, and that new candidate countries for the European Union are committed, as a matter of law, to sign up to the introduction of the euro?

Michael Moore: The hon. Gentleman makes a very important point.

Cathy Jamieson: There has been a great deal of speculation in advance of this statement about so-called sunset clauses. Will the Secretary of State make it absolutely clear whether he has completely ruled out setting a date or setting some time scale within the order that transfers responsibility to the Scottish Government?

Michael Moore: The hon. Lady makes an important point. We have said in the consultation paper—I have said it many times already—that we want this sooner rather than later. We have shown in the draft section 30 order that it would be possible to include a date by which this should be completed. What we have not done is say what that date should be, or the time period leading up to that from the point when we debate it. So we will get on with that process, but it is important that we agree that.

Bob Stewart: My constituency is in Beckenham in Kent, but I am a Scot, and I am surrounded by Scots. I have got a Stewart there, my hon. Friend the Member for Penrith and The Border (Rory Stewart), and a Stewart there, my hon. Friend the Member for Milton Keynes South (Iain Stewart). I am a Stewart; I am half a Stewart; and I have got a half-Scot beside me in the Father of the House. We are very interested in what happens in Scotland, and I would like to ask the Secretary of State how we can put our views forward properly about what happens to our ancestral homeland. [Interruption.]

Mr Speaker: Order. Having heard the question from the hon. Member for Beckenham (Bob Stewart), I am all ears; I want to hear the Secretary of State’s answer.

Michael Moore: The hon. Gentleman was right to say the Stewarts have a proud tradition in Scotland, as do many, many others—I do not wish to get into a battle of the clans. I encourage the hon. Gentleman to take a copy of the consultation, and I look forward to his contribution to it.

Gordon Banks: We have already heard this afternoon about the SNP’s preference for 16 and 17-year-olds to be able to vote in this one-off referendum. Can the Secretary of State tell me whether there has been any impediment, over the past five years, to the SNP Government in Holyrood lowering the voting age to 16 or 17 for Scottish council elections?

Michael Moore: The Scottish Parliament can determine all the appropriate arrangements on devolved matters. What I have said clearly today is that it cannot do that on a referendum about independence. It is important
	that we sort this out, but I agree that we should judge this by how people have acted rather than by what they complain about now.

Ben Wallace: Some 1.9 million Scots voted for Unionist parties in 2010, compared with 480,000 who voted for the Scottish National party. Westminster Scottish MPs have every right to speak for Scotland with an equal, if not greater, mandate. Has my right hon. Friend given any consideration to the tens of thousands of service personnel working in Scottish regiments or in the British Army, posted abroad or in England, and whether they will be allowed a vote or a say in the future of the United Kingdom?

Michael Moore: My hon. Friend has, of course, represented people in both Scotland and England and he speaks with authority on these matters. I entirely take his point about mandates. He raises an important point about the involvement of defence personnel and I look forward to his contribution to the consultation.

Tom Harris: I welcome today’s statement. What discussions has the Secretary of State had with Ministers about the possibility of a clarity Act, which might be seen as a somewhat less heavy-handed mechanism to force our nationalist friends to ignore their own base instinct and to offer the Scottish people the fair and honest referendum we deserve?

Michael Moore: Nobody here intends to be heavy-handed or to force anything. What we want to do is find agreement that will enable us here at Westminster to ensure that the Scottish Parliament has the powers to conduct the referendum and that it does so in a fair and decisive way. We are starting a consultation period today. I look forward to everybody contributing to it.

James Wharton: The Secretary of State has indicated that he believes that only those who are on the electoral register in Scotland should get to vote in any referendum. Does that extend to registered overseas voters who remain on the Scottish register? If it does, will he look at the possibility of extending that facility to those Scots who find themselves living not abroad, but elsewhere in the United Kingdom?

Michael Moore: As I have said on a number of occasions, we are proposing that the franchise should be that which elects the Scottish Parliament.

Gemma Doyle: The leader of the Scottish Labour party called today for cross-party talks in Scotland on issues including the date of the referendum. I know that the Secretary of State has already welcomed cross-party talks. Can he confirm that the Liberal Democrats would be willing to participate, and that he in his role as Secretary of State would participate in such talks?

Michael Moore: I am sure the new Scottish Labour leader will be talking to our colleague, Willie Rennie, the leader of the Scottish Liberal Democrats, but I agree with the principle. We should all be talking together so that we can ensure that we get the right process for the referendum, we make it legal, we ensure that there is
	a fair process beyond reproach and that we get a clear-cut outcome. That is in all our interests and I welcome the principle that we should all meet to talk.

Robert Smith: Surely the clear message today from the statement is to the Scottish Government to engage in the consultation, because it gives the clearest opportunity for the people of Scotland to have clarity in a debate that is based on the issues and not one that is dragged through the courts.

Michael Moore: I entirely agree with my hon. Friend.

John Robertson: A good new year to you, Mr Speaker, and to all Members of the House.
	Fuel poverty is rising, child poverty is rising and pensioner poverty is rising. We have seen from the arrogance of Members on the Scottish National party Benches that this matter is going to end up in court. How much will the consultation and the referendum cost the British taxpayer?

Michael Moore: I reciprocate the wishes of the hon. Gentleman for a happy new year and hope we may all be in a good mood throughout it. Of course there will be a cost to any democratic process, but it is clear that we have a major historic decision to make. I am keen that we get on with that and that we do it in a clear, fair and decisive way.

Iain Stewart: During the consideration of the Scotland Act 1998 in this place, the then Scottish Secretary, Donald Dewar, said:
	“A referendum that purported to pave the way for something that was ultra vires is itself ultra vires.”—[Official Report, 12 May 1998; Vol. 312, c. 598.]
	In the absence of his being able to publish legal advice, does my right hon. Friend agree that that statement makes it perfectly clear where the law stands?

Michael Moore: As ever, my hon. Friend has been assiduous in his homework, for which I commend him. Indeed, the late sadly lost leader, Donald Dewar, when he debated it from the Dispatch Box all those years ago, set out clearly what he believed would or would not be allowable within the law. I think the Act was well written. It is clear and I invite everybody to scrutinise it. I believe that when they do, they will come to the same conclusion as we have. Therefore we need to get on and provide a legal basis for the referendum.

Stewart Hosie: The Scottish Secretary made great play of what he called uncertainty threatening business investment, so he will be aware of the Wood Mackenzie report today, which shows record North sea investment planned for 2012 and consistently high investment going beyond 2014, which rather gives the lie to the allegation that he made. Will he come clean with the House? Can he name one company that has threatened not to invest, or will he finally do the right thing and apologise for his scaremongering?

Michael Moore: The hon. Gentleman is not usually so churlish. He should understand better than almost anyone else, because he studies these things carefully,
	that businesses take decisions on a very long time scale. They are looking for certainty. They want confidence in the future, and as we have seen with the Citigroup report, the Institution of Mechanical Engineers and the CBI, which the last time I looked spoke for many businesses across Scotland and the UK, uncertainty is bad for business and bad for jobs. Let us get rid of that uncertainty. I cannot understand why the hon. Gentleman and his friends do not want to resolve this and get on with the real debate.

David Mowat: The Secretary of State will have seen today’s press reports which say that apparently, as of this week, the Scottish First Minister is applying the finishing touches to his own referendum plans and will publish them in the next month. If that turns out to be the case, would the Secretary of State agree that at last we were making some progress?

Michael Moore: I hope that on the basis of the early conversation that we have had and the intent on my part that we should have further discussions, we will be able to consider the proposals that we have set out in detail this afternoon. It makes common sense and it is the most reasonable proposition on earth that we should get the two Governments working together to provide a legal, certain basis for the referendum, and then we can get on and have this most profound debate about our future in Scotland.

Sheila Gilmore: I welcome the commitment from the Secretary of State to the broadest negotiation and widest discussion within Scotland on the subject, but I hope he will agree that it is unwise to conduct the debate through statements made in the media or on television programmes, even by people as exalted as the Prime Minister.

Michael Moore: Over the coming weeks we will have many different ways of contributing to the debate, whether we are politicians or people across Scotland. I look forward, whether in my own constituency or any other part of Scotland, to people looking at the consultation, engaging with the issues and giving us their views. It is not about politicians. It is about the people of Scotland.

Glyn Davies: Relentless debate in Scotland led by the Scottish Government about Scottish independence causes great uncertainty throughout the United Kingdom, including in Wales. We cannot afford this distraction. Does my right hon. Friend agree that the issue should be dealt with as quickly as possible to ensure that Governments throughout the United Kingdom, including devolved Governments, concentrate and focus on growth, jobs and the things that we really need?

Michael Moore: Yes.

Iain McKenzie: It will come as no surprise that I welcome and agree with the Secretary of State’s desire to hold a referendum as soon as possible. Does he agree that the desire of the SNP Government
	in Scotland to hold a referendum as late as possible is an indication of their inability to answer the many, many questions that have been put to them by the Scottish people on separatism?

Michael Moore: As I have said a few times this afternoon and many times elsewhere, it is a real curiosity for a party that has always existed for one purpose to be so reticent about getting on with the debate about Scotland’s future within the United Kingdom or as a separate country. I hope that we will now get a proper, constructive, reasonable engagement where we can get on with that real debate.

Jeremy Lefroy: Does my right hon. Friend agree that a referendum should not involve a sterile discussion of costs and benefits or political advantage, but the great strengths that Scotland brings within the United Kingdom and that being part of the United Kingdom brings to Scotland?

Michael Moore: I absolutely agree with my hon. Friend.

Michael Weir: In answer to an earlier question, the Secretary of State again went on about the uncertainty caused by the lack of a referendum, but when the Prime Minister’s spokesman was asked about this this morning, the only thing he could refer to was a Citigroup report, the same one that the Secretary of State referred to, which is specifically on renewables. But if he looks at it he will know that Gamesa, SG, Doosan Babcock, Mitsubishi, Aquamarine Power, EDP Renewables and Repsol—

Dawn Primarolo: Order. The statement has been going on a long time already and Members still wish to speak. The hon. Gentleman knows very well that he should be brief.

Michael Moore: The hon. Gentleman needs to pay attention to people at the CBI and others and recognise that it is self-evident that when there is uncertainty about the constitutional future of Scotland, investment decisions will become difficult. I want to get all question of uncertainty removed from the debate. I cannot understand why they seem so reluctant to get on with it.

Jo Swinson: The SNP at Holyrood has a political mandate to hold a referendum on independence, so I welcome my right hon. Friend’s plans to devolve the powers so that it can be held legally and fairly, but does he agree that page 28 of the SNP manifesto clearly shows that that mandate is for a simple yes-no question, so that there is no confusion, no legal chaos, just a decisive result, decided by the voters, not the courts?

Michael Moore: There have been a number of months where the prospect of two questions has been bandied around, although when pressed Ministers were unable to answer how one would determine which result to pay heed to if both were given yes votes, particularly if independence got, say, 51% and extra powers got 80%. Apparently, independence would have won. We need a single, clear question, and I am glad that after many
	months of skirting around this, the Deputy First Minister yesterday conceded that point and said she wanted a single question herself.

Graeme Morrice: I welcome the Secretary of State’s statement. Could he therefore confirm that if the UK Government devolve the power to hold a referendum on separation, as he has said, to the Scottish Government, Alex Salmond would have no excuses left whatsoever for not getting on this year, or next year at the very latest, with holding a referendum on Scotland’s future?

Michael Moore: I want that referendum to take place sooner rather than later. We are offering to fix a problem that exists and make sure that we can get on and conduct that referendum in a reasonable way. I hope that we will be able to work together with the Scottish Government to get those issues resolved and get on with that debate.

Mary Macleod: I welcome the statement and congratulate the Government on their leadership on this important matter to Scotland and the UK. What reassurance has the Secretary of State had from the Scottish National party and the First Minister that they will work with the UK Government on this and accept a fair, legal and decisive referendum?

Michael Moore: I hope that the Scottish National party will engage with this. I am pretty sure that it will because when it gets the chance to study the detail, it will see that what we are offering is a very reasonable process by which we can get rid of the legal uncertainty and have a fairly conducted and decisive referendum.

Jim McGovern: Further to an earlier question about the manifesto, is the Secretary of State aware that nowhere in the SNP manifesto, as far as I am aware, does it say that a referendum will take place in the second part of the Parliament? It says only that a referendum will take place. It constantly tells us that it has an overwhelming mandate to hold a referendum in the second half of the Parliament; that is strictly not true.

Michael Moore: The manifesto was clear. It was about a straightforward question on independence, not about the timing. We believe this should happen sooner rather than later, and I look forward to the responses that we get from people across Scotland.

Fiona Bruce: Given the references that we have heard in the public debate on this matter to legally binding referendums and consultative referendums, does the Secretary of State agree that that is a totally false distinction?

Michael Moore: My hon. Friend has put her finger right at the heart of the issue. There is no distinction in the legal status of referendums in Scotland between one that might be considered advisory or consultative on the one hand, and a so-called legally binding one on the other. The Scottish Parliament does not have the power to have a referendum on independence. We are offering
	a way by which we can devolve that power on a fair and reasonable basis that will ensure that we get a clear and decisive outcome.

Katy Clark: The Secretary of State will be aware that the SNP is putting a significant amount of effort into fundraising, given that this is basically everything that they are all about. What does he think his role should be in ensuring that there is a full debate in Scotland? Does he agree that many people in Scotland have not really given proper consideration to the arguments for and against separation?

Michael Moore: The hon. Lady gets to the heart of the issue about how we would conduct the referendum when it takes place and the need for it to be done on a basis that is recognised and not challenged by people who are either participants or voters. It is important that spending limits and all other aspects of the rules of the process are clear. It is for that reason that we are suggesting that the Electoral Commission might be, or would be, the appropriate way to oversee the process. I hope that as we debate this people will agree on that point.

Philip Hollobone: My constituents in Kettering deserve a say on the future make-up of the United Kingdom just as much as the Secretary of State’s constituents in Berwickshire, Roxburgh and Selkirk. The way to overcome the legal challenge is not to devolve the powers to the Scottish Government, but to hold a UK-wide yes or no referendum with the result announced in two parts, one the result from Scotland and second the result from everywhere else, because it may well be that Scotland votes to stay, but the rest of the country invites Scotland to leave.

Michael Moore: If I may say so, I regret the slightly discordant tone of my hon. Friend’s observation. I have answered the point several times already. It is important that we follow the democratically appropriate route and the internationally recognised way of doing this and allow for self-determination within Scotland on this important issue.

William McCrea: I welcome the Secretary of State’s statement. Can he assure me that this Government will be robust in its defence of the Union?

Michael Moore: I am absolutely committed to Scotland remaining part of the United Kingdom. When we can get on to that debate, I will be clear in arguing the case on that, day in and day out. At the moment we have to get to that debate, and today we have offered a reasonable and straightforward way that we might do that.

Russell Brown: My hon. Friend the Member for Dundee West (Jim McGovern) is exactly right. The SNP manifesto last year made no reference whatsoever to the second half of the Parliament, but does the Secretary of State feel that if the legal powers are transferred and the SNP has a good showing in May’s local government elections, the First Minister might just take a gamble, ignore the second half of the Parliament and go for a snap referendum?

Michael Moore: I am not going to speculate on the election results in May, but I agree that we should get a clear basis for the referendum and get it sooner rather than later.

Angus MacNeil: The Secretary of State has made a big issue of a point of law, but in June last year, Professor Stephen Tierney, professor of constitutional theory at Edinburgh university, said:
	“The Scottish Parliament has the authority to stage a referendum.”
	Does the Secretary of State agree that Scotland’s democratic Parliament does not need Westminster’s permission for a self-determination referendum, although a generous spirit from the Westminster Government would indeed be welcome?

Michael Moore: I am afraid that for reasons that should now be obvious I do not agree with the hon. Gentleman.

Nia Griffith: The Secretary of State will be aware that in Wales a convention process took place before the referendum on further powers. Can he explain exactly how we will ensure the fullest possible participation by trade unions, the business community and a genuinely representative cross-section of civic society in the consultation that he has announced?

Michael Moore: The consultation is open to everyone in Scotland and across the United Kingdom, and indeed elsewhere, should they wish to offer their opinions. I am confident that we will get a good response, and I hope that we will then be able to chart a way to getting a legal, fair and decisive referendum and a proper decision on Scotland’s place in the United Kingdom.

Wayne David: I understand that the Scottish First Minister has announced that there will be a referendum in the autumn of 2014. Will the Secretary of State give his reaction to that indication, and tell us whether it is correct?

Michael Moore: I anticipate that the debate over the timing of the referendum will continue for a long time unless we resolve the legal basis on which a referendum might take place. At the moment, no referendum initiated by the Scottish Parliament could take place. We are determined to ensure that we give the Scottish Parliament that power in the appropriate way so that we can get on with the debate as soon as possible.

Kevin Brennan: More Welsh Members are left until the end, Madam Deputy Speaker. Is not the SNP wrong to say that there have never been binding referendums in the UK before? Was not the unsuccessful referendum on the alternative vote that the Government held last year a binding referendum?

Michael Moore: It is not a question of whether the referendum is binding, consultative, advisory or whatever other adjective the hon. Gentleman cares to apply. At the present time, the Scottish Parliament could not bring forward a referendum on a legal basis. We want to ensure that it can do so, and are offering the way that that can be done through the consultation.

Chris Bryant: It is not just the euro that an independent Scotland would have to sign up to if it wanted to join the European Union, is it? It would also have to sign up to the Schengen agreement, because European law makes it absolutely clear that that would have to happen. Would we be considering setting up border controls between England and Scotland?

Michael Moore: As the Member of Parliament who represents the longest stretch of that border, I hope that we will never be in a position in which such barriers might exist. I am confident that when we get to the proper debate, that will not be the way it ends up.

Dawn Primarolo: Secretary of State, thank you. Some 57 Back-Bench Members participated in the statement.

Points of Order

Gareth Thomas: On a point of order, Madam Deputy Speaker. As you will be aware, in accordance with our parliamentary duties, all Members at one time or another table written questions, and inevitably expect a reasonable delay before they are answered. I have four written questions that have not been answered by the Department for Environment, Food and Rural Affairs, the earliest of which was tabled on 13 October 2011. Another was tabled on 17 October and the remaining two on 27 October. Will you advice me on whether there are any devices I can exploit in order to encourage the Secretary of State to ensure that I receive answers to those questions?

Dawn Primarolo: As the hon. Gentleman will know, that is not strictly a matter for the Chair, but he has successfully exploited one of the mechanisms whereby Members can draw a matter to the attention of the Leader of the House, who is in his place. The quality of answers from Ministers is not the responsibility of the Chair, but I am sure that the Leader of the House will ensure that the appropriate message is conveyed to the Department.

Kevin Brennan: On a point of order, Madam Deputy Speaker. You and Mr Speaker are always very generous in accommodating Back-Benchers during ministerial statements, but Mr Speaker had to speak to a Minister earlier about the length of the initial statement that was made. Would you advise us on what advice is given to Ministers on how long their initial statements should be?

Dawn Primarolo: Nice try, Mr Brennan. Strictly speaking, that is a matter for whoever is in the Chair at the time and the Minister. As Mr Speaker has made clear on a number of occasions, particularly when a large number of Members wish to participate, the Chair’s expectation is that the Minister at the Dispatch Box will take due note and make a contribution of an appropriate length to ensure that everyone gets in.

Park Homes (Site Owner Licensing)

Motion for leave to bring in a Bill (Standing Order No. 23)

Stephen Gilbert: I beg to move,
	That leave be given to bring in a Bill to make provisions to require owners of park home sites to undergo a fit and proper person test; to introduce a national licensing scheme for individual owners of park home sites; and for connected purposes.
	The Bill would help to increase protections for some of the most vulnerable in our communities—those who live on park home sites—by introducing a national licensing regime and a fit and proper person test for those who seek to own such sites. As hon. Members will know, park homes are modern bungalow-style residential properties, usually sited on private estates. The park home industry is a billion pound business and there are more than 2,000 park home sites across the UK, primarily but not exclusively in rural areas such as Cornwall.
	For the vast majority of the quarter of a million residents on park home sites, their park home constitutes their only home. Many residents are elderly, with a number of park home sites setting a minimum near-retirement age as a condition of residence. Indeed, the industry heavily markets itself to property-rich, but cash-poor, senior citizens. The advertising paints a picture of like-minded individuals forming idyllic communities in which they will live out their twilight years in comfort and contentment, made all the better by the equity release that moving to a park home brings. Almost all the sites are privately owned and run as profit-making businesses.
	Most sites are owned by individuals, and although some site owners own a single park, others might own 20 or more. Park owners with a single site will tend to manage it themselves, but those with multiple sites might employ site managers to run individual sites on their behalf. Sites can be bought and sold at the whim of an individual. Anyone can own a park home site, and as things currently stand, a long criminal history or prior evidence of malpractice within the industry is no barrier to an individual buying and running a site. The current residents of a site have no say whatever about it being sold, or who purchases it.
	I want to be absolutely clear that the majority of park home site owners conduct themselves in a professional manner and serve the people they accommodate well. However, the actions of a small but significant number of site owners who harass often vulnerable and elderly people can no longer be ignored. My Bill proposes one way of addressing this bad practice within the industry, by bringing in a national licensing regime for the owners of park home sites and a fit and proper person test. I do not believe that those measures alone will address all the problems faced by some residents, but they will be a step towards the greater protections that are desperately needed.
	We should be clear that the majority of park home site owners have absolutely nothing to fear from a fit and proper person test, which in my opinion would help to drive up standards across the industry, but we need to take steps to secure a thriving and well-run park
	home sector that continues to provide people with sites on which they want to live, and opportunities for investment for others. I believe that a national licensing system will maintain standards, root out bad practice and ensure that sites are safe, well planned and well managed, and have appropriate facilities and services.
	Indeed, the previous Government said in their March 2010 document “Park homes site licensing reform” that they were committed to
	‘a comprehensive licensing regime which ensures that only “fit and proper” persons are engaged in the management of park homes sites and which is backed by effective enforcements tools’.
	This Government’s Housing Minister said in a written ministerial statement in February last year that he was
	“announcing my intention to consult on a further package of measures that could improve and modernise the licensing regime that applies to caravan and park home sites to enable local authorities to more effectively monitor and enforce licences and, therefore, better protect the many thousands of older households who live in this sector.”—[Official Report, 10 February 2011; Vol. 523, c. 15WS.]
	That was welcome news in 2010, as it was the year after, but so far there has been little sign of a consultation emerging from the Government. I am delighted that my right hon. Friend the Secretary of State for Communities and Local Government is in his place to hear me tell the House that the one thing that park home residents across the country are saying to us is that they need the Government to get on with this.
	In the absence of further action by the Government, my Bill seeks to help the two in every three park home residents who report living in unacceptable conditions. Almost half of all residents report living under the regime of an unscrupulous park owner. It aims to build on the work of hon. Members from both sides of the House in raising this important issue, notably my hon. Friends the Members for Mid Dorset and North Poole (Annette Brooke) and for Romsey and Southampton North (Caroline Nokes). I am delighted that the Bill has attracted cross-party support, and note that other Members—such as my hon. Friend the Member for Wyre and Preston North (Mr Wallace)—also wanted to have their names on the Bill, but could not be accommodated. It is clear that there is a desire on both sides of the House to sort out the problems that for too long have bedevilled the park homes industry.
	Problems in the park homes sector occur because the current system of regulation and the industry’s economics make it an attractive proposition to a number of rogue site owners who are intent on making substantial sums of money. When taking over a site of, say, 30 park homes, a rogue site owner only needs to replace 10 existing homes with new ones to make a significant profit. Of course, the problem for the rogue site owner in achieving that is that there might not be 10 individuals who want to leave the site. Rogue owners then begin a process of forcing residents to leave, or to sell their park homes to the site owner on advantageous terms.
	Practices that are, sadly, commonplace include the vetoing of all sales of homes within the site, including any that are part way through. Although regulations allow home owners to challenge the unreasonable rejection of prospective purchasers, the reality is that most do not have the emotional or financial resources to take
	the site owner through the court process. In addition, the length of time that it would inevitably take for that process to be completed would no doubt result in the loss of that prospective purchaser.
	The Park Home Owners Justice campaign, ably led by Sonia McColl, reports that rouge site owners visit local estate agents who market park homes to tell them that they will not allow any homes on their site to be sold. Rogue site owners also intercept prospective purchasers visiting the site to put them off, by rubbishing either the home or even the site in general, and they bully residents by telling them their homes are defective in some way, and threaten to evict them from the site unless their homes are brought up to standard.
	It is reported that rogue owners tell residents that improvements to their park homes are illegal when they are not. Many park home residents report being subject to harassment, intimidation, abuse, and, in the worst cases, arson of their park homes. Through such abuses, a site owner effectively traps residents in their homes while creating a climate of fear. Many residents are frail and vulnerable, and their physical and mental health can be easily impacted on. Eventually, the suffering reaches the extent that, desperate to get out, the resident will sell to the site owner for a fraction of the park home’s market value. There is evidence of rogue site owners then buying further sites where the same tactics of abuse are brought to bear on a different group of luckless residents.
	My Bill seeks to create additional protections for residents of park homes by creating a two-tier licensing regime. In an era of localism, it is right that local authorities should be responsible for issuing and monitoring the site licence, which would cover such matters as the site’s suitability, amenities and services. In line with the recommendation from the trade and the two national residents associations in response to the previous Government’s consultation, there should be a national licensing authority, the role of which would be to decide whether an applicant to own a park home site was a “fit and proper person”, and suitable to manage the accommodation of others. I suggest that that responsibility could sit with the newly empowered residential property tribunal service. If so, the national authority would issue a personal licence. If the applicant were refused a licence, he would not be able to manage any park home site anywhere.
	It is that two-tier approach, as part of a package of other measures that I expect from the Government, that I wish to commend to the House. Those of us who have significant numbers of park homes in our communities know only too well that budget pressures mean local authorities often do not resource park home issues properly at the moment. We also know that many environmental health officers do not have the expertise in legal and financial matters in the context of park homes, and are not best placed to assess someone’s suitability to own and manage a site. A national regime would remove the chance of duplication in the work of local authorities, and therefore reduce the costs of introducing additional protection for park home residents, as well as ensure a consistent level of national protection for all residents of park homes.
	I am sure that all hon. Members agree that we need to ensure that everybody can enjoy their home unfettered, and I commend my Bill to the House.

Christopher Chope: I just want to put down a marker. Not everybody in the House thinks that the solution to this problem, which the hon. Member for St Austell and Newquay (Stephen Gilbert) rightly identifies, is the one that he proposes.
	As chairman of the all-party parliamentary group on mobile homes, I am well aware of the problems with park homes, particularly regarding their sale. Indeed, I introduced the Sale of Park Homes Bill, which sadly has not yet received a Second Reading. Not only that, but it has not even been printed, because I have been waiting until I have seen the consultation paper that the Government said they would publish last year. The Minister for Housing and Local Government is sitting on the Front Bench, and I hope that that consultation paper, which he has promised, will be published very soon. When it is, I anticipate that it will show that the solution—

Dawn Primarolo: Order. Mr Chope, are you speaking in opposition to the ten-minute rule Bill?

Christopher Chope: Yes, Madam Deputy Speaker, I am speaking against the Bill because the hon. Member for St Austell and Newquay does not have the right solution to the problem. He has identified a problem that exists in many hon. Members’ constituencies, but that does not mean that any legislation that purports to address it will deliver. That is why I am speaking against the Bill. I am putting down a marker on the Bill, but at the same time encouraging the Minister to produce the consultation paper.
	My feeling is that the problem would be better addressed by focusing on the sale of park homes rather than by introducing an inevitably bureaucratic and heavy-handed licensing system. As the hon. Gentleman said, a very large proportion of park home site owners are reasonable and supported by local residents. Why should those good park home site owners be put through that hoop? Why should they have an extra bureaucratic burden placed upon them, which ultimately must be paid for by the hard-pressed residents to whom he referred?
	I suggest that, like many ideas that come before the House, this idea would mean introducing disproportionate and heavy-handed regulation to address a problem. How would the idea of a fit and proper person test, which is at the core of the hon. Gentleman’s proposal, work in practice? Are we saying that only people with criminal records would be excluded from becoming park home site owners, or would exclusion be extended more widely? How will we deal with corporate bodies and companies? We know that many rogue directors run companies up and down the country. How would we deal with them? Would his solution of a fit and proper person test address that?
	I am urging on the hon. Gentleman the idea that there might be better ways to address the problem than having the knee-jerk reaction of saying, “Let’s have more regulation, and a new fit and proper person test that everybody must go through.” In my submission, that test has not been properly analysed. I shall not press the motion to a Division tonight, but the Bill might be printed, and then he might see that the consultation paper has a better solution, along the lines I have suggested. That could be the way forward.
	I will not speak any longer, because there is a lot of pressure on the time of the House, but I thought it would be wrong to allow this proposal to go through on the nod just because everybody agrees that there is a problem to be addressed. Hon. Members must be assured in their own minds that the solution proposed is the right one.
	Question put and agreed to.
	Ordered,
	That Stephen Gilbert, Mr Robert Buckland, Andrew George, Stephen Lloyd, Tessa Munt, Sheryll Murray, Caroline Nokes, Dan Rogerson, Mr Adrian Sanders, Heather Wheeler, Dr Sarah Wollaston and Gordon Banks present the Bill.
	Stephen Gilbert accordingly presented the Bill.
	Bill read the First time; to be read a Second time on Friday 30 March ,  and to be printed (Bill 268).

Local Government Finance Bill

Second Reading

Eric Pickles: I beg to move, That the Bill be now read a Second time.
	It is a relief to be called after all that waiting, Madam Deputy Speaker.
	The coalition agreement committed the Government to supporting sustainable growth and enterprise, balanced across the country. It also pledged the radical devolution of power and greater financial autonomy to local government. This Bill delivers on those promises. It aims to introduce much-needed reforms to make England’s local government finance system more effective at supporting local jobs, local firms and local enterprises. This is not just about redistributing a pot of cash differently; it is about providing the best possible chances to foster more growth, generate more cash and make a bigger pot.
	The case for change is widely recognised. The OECD has called the English local government finance system one of the most centralised in the world. The Labour Government knew that, but failed to deliver on reform. There were Green Papers, White Papers, the “Balance of Funding” report, the Lyons inquiry and, if that was not enough, the Labour party manifesto at the last general election boldly pledged another commission on local government finance. What little reform was introduced, such as the so-called local authority business growth incentive scheme, was timid, inconsistent and ineffective. The only thing Labour managed to do was to double council tax and halve local services, such as bin collections—pay more and get less.
	Where others have failed to deliver, however, the coalition is ready to act. Nowhere is the need for change more apparent than in relation to business rates. Currently, councils collect rates for local businesses, but they are no more than the agents for central Government. No sooner is the cash in than Whitehall whisks it away. Whitehall feeds the figures into a very complex formula. Each council waits with bated breath to see how much it will get back. The 160-page local government finance report requires a detailed knowledge of multiple regression to fathom it out.
	The system creates a perverse regime of incentives. Councils that work hardest to boost local businesses do not see their efforts reflected in the state of their finances. In fact, local economies that become more successful can effectively see their central Government grant cut. The regime actively encouraged councils to talk down their area, to mask their success and to amplify their deprivation; it breeds a begging-bowl mentality and a race to the bottom. Surely, now more than ever, we should welcome growth and reward incentives.
	There is some criticism that Labour failed to deliver on its election pledges. Well, we are here to help. In the Localism Act 2011, we introduced a general power of competence, implementing a pledge in the 1983 Labour party manifesto. However, we have now moved on to the 1997 Labour party manifesto, and we are moving towards the localisation of business rates. The Government believe that councils should have every possible incentive to encourage local business, support local jobs and create the conditions for the local economy to thrive.
	The Bill paves the way to repatriating business rates. We want to give councils a greater proportion of the rates they raise locally. Every council that grows its business rate base can be sure that it will see an increase in its income, compared to the status quo. Putting in place the right incentives gives every council every possible reason to go for growth, which creates the potential to raise more cash overall to invest in local services and local community priorities. Of course, we have heard a few grumbles already.

Kevan Jones: I spent nearly 12 years in local government, and I accept that it is an important catalyst for encouraging local economic development, but it is not the only one. There is a huge disadvantage in all this for my constituents, compared, for example, with constituents in south-east England. Surely, in any consideration of local government finance, the disparities between the economies of such areas should be taken into account.

Eric Pickles: Frankly, I am amazed by that contribution, because Durham will be one of the big beneficiaries of the scheme. Had this system been in place, Durham would undoubtedly have more money in its coffers. I strongly urge the hon. Gentleman, for whom I have enormous respect and affection, to talk up Durham, because it will do very well under this scheme.

Helen Goodman: I am afraid the Secretary of State’s view is not shared by Durham county council, which believes it will lose £100 million, in contrast to the City of London, which we all understand will see its business rate take increase 140%.

Eric Pickles: The hon. Lady needs to look at the facts. Durham will be a beneficiary. The level of support it will get in terms of top-up—in terms of its actual growth —will increase, and that will give the people of Durham considerable respect and pride.
	Let us just deal with some of these grumbles. Some are worried that the reforms might lead to polarisation and that deprived areas might fall behind. I can entirely understand—we have seen examples of this today—that people are reluctant to see change. It is always hard to let go of a security blanket, but we have been clear that we will ensure the hardwiring of safeguards for the most vulnerable in these reforms. Protections, including a system of tariffs and top-ups, will ensure that councils that start from a low business rate can still meet people’s needs. We will have a levy on authorities that see a disproportionate benefit, with a safety net for authorities that see their business rates fall significantly.

Mark Field: I very much welcome the principle of allowing local authorities to retain a proportion of their business rate. That is a very positive move. My right hon. Friend has made the case that he is being rather pragmatic, but perhaps he will go into a little detail about two areas where I am concerned he is perhaps being overly pragmatic: growth for inflationary reasons and growth where there has been a revaluation. As he knows, there has been significant revaluation in recent years, so why cannot some of that revaluation, where a substantial part has been in a particular local authority area, be used as an element of growth for the purposes of the business rate adjustment that is being brought into play?

Eric Pickles: Of course, in that process of revaluation, we would seek to adjust the multiplier so that it had a neutral effect on the amount. What we are talking about is ensuring that, between periods of revaluation, an authority that grows above the national average can actually bank that. However, some authorities will clearly get a disproportionately large increase, and we have a levy, through which we seek to take that sum away and to apply it to the safety net.

Alok Sharma: I welcome these reforms, which will incentivise local authorities and local government to encourage growth, but will the Secretary of State confirm that they will not allow some local authorities to raise business rates on already struggling businesses?

Eric Pickles: I am happy to confirm that fact to my hon. Friend, because he raises an important point about local businesses needing a degree of certainty. Of course, the Secretary of State—the person holding my position—will set the multiplier and the sum.
	There is something strange about all the objections, some of which we have heard already, in that they betray a lack of faith in the people whom we represent. No one area has a monopoly on the formula for growth. Economic success is not a southern phenomenon.

Kevan Jones: Yes, it is.

Eric Pickles: I do not know whether colleagues were listening but I heard an Opposition Member say that economic success was a southern phenomenon. If that is what Opposition Members think, they should seriously consider whether they are doing their electorate a service.
	If our reforms had been in place over the past five years—since the last revaluation cycle—places such as Liverpool, Doncaster, Durham and north and south Tyneside would have benefited, because their growth in business rates outstripped the national average.
	Most of all, however, the grumblers have missed the key point. This is not simply about redistributing the proceeds of growth. If these reforms lead to every council working as hard as possible to help business to thrive, there is the potential to increase overall growth.

Jim Fitzpatrick: As part of the south-east phenomenon—the area that I represent covers Canary Wharf and the London borough of Tower Hamlets—my constituency would naturally, I assume, be a winner from these reforms. Has the Secretary of State seen the briefing issued today by London Councils to London MPs? It welcomes the retention of part of the business rate but then states:
	“However, the Bill as drafted creates a fiendishly complex system in which the level of the business rate incentive is uncertain and unpredictable”.
	Will he respond to that concern from London Councils?

Eric Pickles: Yes, of course. The idea is to give the maximum incentive to councils. That is how the system is being devised. However, it is much simpler than the existing system, which is just about impenetrable. Indeed, London Councils considered that point some time ago when it described the four—[Interruption.] Ah, I have
	it in front of me. How very helpful! This is marvellous. Bob always comes up trumps. This quote comes from the London Councils’ report, “Four Block Muddle”:
	“The current formula grant system…lacks transparency and is inherently unstable and unpredictable, generating fluctuations in grant allocation that defy logic… Even finance experts, let alone members of the public, struggle to understand the working of this complex system.”
	So here we are introducing a much better system, and, to coin a phrase, I would have expected local councils to rejoice, rejoice, rejoice.

Nick Raynsford: rose—

Eric Pickles: I give way to the right hon. Gentleman, the architect of our present system.

Nick Raynsford: I am grateful to the Secretary of State but I have to say that many other people besides me were architects of the existing system. However, given that doubts are being expressed by many local authorities about whether the provisions in the Bill will achieve the objectives that the Secretary of State has set out, will he, in words of one syllable and in plain English, explain the provisions in the first seven clauses of the Bill, which to most people are absolutely incomprehensible gobbledegook?

Eric Pickles: I feel a little stung because I have always been most helpful to the right hon. Gentleman.
	Clause 1 deals with the local retention of the non-business rate and provides for the framework of the rate retention scheme in England by inserting a new schedule 7B into the Local Government Finance Act 1988. Clause 2, on the revenue support grant, gives effect to schedule 2, dealing with the amendment of provisions about revenue support grant in England. Clause 3, on additional grant, amends the 1988 Act to remove the provision for the Secretary of State to pay additional grant to local authorities in England. It also makes consequential amendments to the Local Government Finance Act 1992 and the Greater London Authority Act 1999. Clause 4, on the local government grant, amends section 100 of the 1999 Act so that from 1 April 2013 the Secretary of State may pay a general grant to the Greater London authority for a financial year but will not be required to do so. I think that that covers the point, although we could go through the entire Bill—there are only 16 clauses.

Bob Blackman: I thank my right hon. Friend for giving way on this key issue. One of the key concerns for people raising additional business rates in the future will be that they gain from the benefit of that growth. I welcome that proposal. However, there is another problem. Will he confirm that if a major employer or site of employment closes down within the first two years of operation, the local authority will not lose the business rate income?

Eric Pickles: My hon. Friend raises an important point about the very nature of business rates. There is a high degree of buoyancy within the system and there can be sudden movements, particularly where firms move out and following claims for revaluation, which is why we have built into the system adjustments to iron
	out those things. We have suggested to local authorities— but it will be entirely a matter for them—that they pool their resources in order to get over those fluctuations.
	I shall move from the incentive effect to another aspect of the Bill: the introduction of tax increment finance. This was recommended in the 2006 Barker report and promised in the 2009 pre-Budget report but never delivered by Labour. For the first time, councils will have the ability to borrow safely and sustainably against the anticipated increase in business rates. That will give them a new means by which to fund infrastructure, attract investors and secure jobs for local people.
	We are determined that the transition to the new system should be effective, fair and workable. Over the summer, we consulted widely, and we heard loud and clear that small firms, charities and voluntary groups, which play such an important role in local life, should not face adverse changes to their bills. Local firms can rest assured that this is not a means of increasing their bills by stealth; rather it is a measure to help local businesses. The Bill also proposes a replacement for council tax benefit.

John Healey: I am grateful to the Secretary of State for giving way on the point about tax increment financing schemes, of which I have been a strong supporter from the outset. Will he confirm that the area and rate take in the TIFs area will be ring-fenced and protected from levies and any reset? Without that confirmation, there will not be the confidence and certainty about the revenue stream necessary to allow the borrowing to take place for the up-front investment.

Eric Pickles: The right hon. Gentleman makes an important point. He will know, because he has taken an interest, that we are offering two types of TIF. TIF 1 will be subject to the levy and the top-up, but TIF 2 would not be subject to either, so it would be possible to borrow over a longer period than the reset.

John Healey: rose—

Eric Pickles: Before the right hon. Gentleman responds, I would like to add something else. I can see that we are going to have one of these really interesting discussions—we might even get on to hereditaments in a little while. Because TIF 2 would affect the levy pot, as well as the level of public borrowing, we will clearly need a degree of Treasury co-operation, but authorities can proceed with TIF 1 straight away.

John Healey: I wish the Secretary of State good luck in seeking that Treasury co-operation. He will understand that the time horizon for TIFs stretches beyond one decade, and sometimes beyond two. He said that TIF 2 would be ring-fenced and protected from the levy; can he also say whether it will be ring-fenced and protected from any reset?

Eric Pickles: The whole point about TIF 2 is that it goes beyond a reset. That is why there needs to be a degree of co-operation from Treasury colleagues. The period for TIF 1, of course, is potentially 10 years. We
	will encourage local authorities to work together on TIFs and pool their resources—I think I recall the right hon. Gentleman speaking about this some time ago—which will be enormously liberating for them.
	The Bill also sets out a replacement for council tax benefit, which is essential in supporting those who, through no fault of their own, struggle to pay their council tax bills. However, rather than having a national, one-size-fits-all scheme, designed and directed by Whitehall, we propose that councils themselves should set up council tax support at the local level. We will give them the flexibility to design schemes that reflect local priorities. Tailor-made approaches will also be essential to making the 10% saving, which is an important component of the plan for reducing the deficit inherited from Labour. Some councils are already considering how they might exercise the new powers and discretions. Westminster city council, for example, is looking into the idea of social contracts, such as linking council tax benefit with obeying the law, actively seeking employment and undertaking voluntary work. That is fundamentally no different from councils such as Manchester and Newham, which are seeking to prioritise individuals in work for council house waiting lists, ending the “something for nothing” culture while providing a safety net for the vulnerable. I believe that benefits should provide the right incentive to get people back to work and to reward social responsibility.

Clive Betts: The reality, surely, is that on day one councils will receive what they are currently paying out in council tax benefit, minus 10%. They will have no choice about where that 10% comes from, because pensioners will be protected—we might support that—as will people in work, because councils have to observe the 65% tapers under the universal credit. In the end, therefore, the totality of those cuts will fall on the unemployed of working age, leading to probably up to 20% to 30% of their benefit being withdrawn. If unemployment goes up and more people claim council tax benefit, that will mean either money drawn from other services to fund it or further cuts for those on council tax benefit who are unemployed.

Eric Pickles: The hon. Gentleman makes a reasonable point, but I would put it this way:
	“Beveridge would have wanted determined action from government to get communities working once again, not least to bring down that benefits bill to help pay…the national debt…He would have wanted reform that was tough-minded, and asked everyone to work hard to find a job.”
	That seems a very reasonable way to express it; indeed, those are the very words of the shadow Secretary of State for Communities and Local Government, in his article in The Guardian last week. I am pleased that that approach was also endorsed by the Leader of the Opposition on the “Today” programme this morning, so frankly, I am not entirely sure that I understand the points being made by Opposition hon. Ladies and Gentlemen.

Mark Field: I very much support the idea of innovation and flair, and allowing for inventiveness, which will certainly apply positively to Westminster city council and all who live in the area. However, my right hon. Friend will be aware that, in the case of some local authorities that try to adopt the new powers, the scheme
	will perhaps work somewhat less well. Will there be any residual power in the hands of the Department or the Secretary of State to intervene where such local authorities fail to provide the lead that we would all wish for?

Eric Pickles: Local authorities are statutorily obliged to deliver a scheme, and that scheme needs to be approved, but we need to have confidence in them. We are talking about a substantial and significant effect of localism. We took the decision to give more powers to local authorities, and we need to be able to trust them.
	However, hon. Ladies and Gentlemen opposite have been saying that their leader did not say those words. I happen to have a transcript from the “Today” programme. He was asked a question about welfare, and this is what the right hon. Gentleman said: there do need to be “big changes”, with a
	“greater sense of responsibility in the system...Anybody who can work should work”.
	We have to
	“have sanctions in our system…I…see…a minority…of people on benefits”
	who have been given a
	“false sense of security…The Beveridge system was about saying people should be rewarded…for contributions.”
	The right hon. Gentleman said that there should always be a safety net, and that
	“In housing…need matters, but…you should also be rewarded with extra points…if you…work or volunteer,”
	saying that some
	“councils…are starting to do this…I am not against a cap”
	on benefits. My word, how out of touch hon. Ladies and Gentlemen opposite are with what their leader is saying!

Jonathan Edwards: Will the Secretary of State give way?

Eric Pickles: In a moment.
	Part of the Opposition now concedes that the housing benefit bill is too big and needs reform. I hope that they would accept that the sister benefit—council tax benefit—should also be reformed. The reform must take place to help reduce the budget deficit. As the shadow Secretary of State for Defence conceded last week, a credible Opposition should reject “shallow and temporary” populism and accept the need for spending reductions. I am very sorry that Labour Members seem to have rejected that advice and that of their leader, given so recently.
	We should all agree that reforms must also offer proper protection for vulnerable groups who cannot return to work. We will therefore be putting in place special safeguards for low-income pensioners, who will continue to be eligible for support. As championed by the Royal British Legion, this Bill will make council tax support a rebate—a discount—rather than a benefit. The previous Government changed the law to rename council tax benefit, but never enacted their own provisions. The Bill also allows changes in council tax to help reduce bills for hard-working families and pensioners. Homes left empty for the long term can be a blight on a neighbourhood. It is immensely frustrating for people who desperately need housing to see houses sitting idle, and for communities to have to tolerate the eyesore and
	crime that such houses cause. Currently, even when houses have been left empty for many months, councils can charge no more than the normal rate of council tax. We propose that councils should have the option of charging a higher rate of council tax when homes have been empty for more than two years. That will provide a stronger incentive for the owners to bring such homes back into use and end empty property blight.
	Alongside the Bill, we have consulted on other proposed changes to council tax—changes that do not require primary legislation. They include reforms to council tax on second homes. Currently, councils are obliged to charge a reduced rate on second homes, of between 10% to 50%. We propose to allow authorities to remove this special tax break completely, treating everyone equally and fairly. Taken together, those flexibilities on council tax have the potential to reduce families’ council tax bills by £20 a year.
	Some have asked whether it is time to review other discounts and exemptions. The Intergenerational Foundation, endorsed by the shadow Minister for London, called for an end to the single-person discount, which would tax the elderly out of their homes. We have looked at the case for ending the single-person discount, and we have rejected it. This Government have no intention of imposing a new stealth tax on 8 million single persons; nor will we increase the tax on hard-working people who pay their taxes, who save and who invest in their homes.
	The Bill stands alongside the action that this Government have taken to make local finance fairer and more effective, including the two-year freeze on council tax, the cancellation of any council tax revaluation, the abolition of the new bin taxes, and the introduction of new rights for residents to veto excessive council tax rises. The measures that we are introducing today will build on those improvements. After years of indecision and inaction by Labour, these measures represent a positive and practical step forward. The Bill will help to create the right conditions for growth, reward councils that boost the economy, and make local government finance more effective and fairer for all. I commend it to the House.

Hilary Benn: I should like begin by wishing the Secretary of State—and, indeed, you and all other Members, Madam Deputy Speaker—a happy new year. I am sure that our return to the House has been looked forward to with even greater anticipation than usual, given that the first piece of legislation that we are to address is the Local Government Finance Bill.
	The Secretary of State touched on the fact that local government funding has long been debated and much argued over. At the heart of the matter is the age-old question, which was highlighted by the Layfield report in the 1970s, of whether central or local government should take the decisions. That question has never been fully resolved because the answer depends on the decisions involved and on what we are trying to achieve. Partly for that reason, Bills proposing fundamental changes to local government finance have not come along very often. The previous two were the Bill that brought in the poll tax, which should stand as a warning of what happens when a Conservative Government get things spectacularly wrong, and the one that replaced it with the council tax. That experience should remind all of us
	that how we fund local authorities and the services that they provide to all our communities is a matter of the greatest importance.
	The Secretary of State reminded us of what the coalition agreement said about a radical devolution of power and giving greater financial autonomy to local government. Indeed, he also referred to his words of last July, when he said that councils would no longer have to come to him with a begging bowl. He has set a very high bar against which his Bill is going to be judged.
	Let me start by examining the way in which the Bill is being handled, which is the subject of tonight’s programme motion. The local government resource review was first announced in the summer of 2010. The terms of reference were published in March last year. I recognise that there has been consultation on the proposals, but that consultation has simply not been carried through into the consideration of the Bill. The Bill was published on 19 December, just before the Christmas recess. We are having the Second Reading debate today, just two sitting days later, and we did not start the debate until 20 to 7 in the evening.
	The Government seem determined to take all the stages of the Bill on the Floor of the House, not because of the nature of the Bill but, as everyone knows, because the business managers are desperately trying to fill up time in the Chamber following their mishandling of the long parliamentary Session. They are not scheduling it in this way as a matter of precedent. Neither the Act that created the poll tax nor the one that replaced it with the council tax—the two Acts that this Bill, in the main, amends—had their Committee stages on the Floor of the House; they went into Committee. This Bill should also go into Committee. That is why we will vote against the programme motion.
	By not allowing the Bill to go into Committee—[ Interruption. ] No, I hope that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) will listen to me. If the Bill is not allowed to go into Committee, there will be no opportunity for wider scrutiny of what the Bill—as opposed to the consultation —says. There will be no pre-legislative scrutiny of the Bill, and there will be no evidence sessions. Nor have we seen any of the regulations in draft. This is a pretty shoddy way for a Government who say that they support pre-legislative scrutiny and evidence sessions to deal with the scrutiny of a Bill.
	On the substance of the Bill, the Secretary of State has advanced three main reasons for the changes—namely, that the present system is too complex, that it gives Governments too much power and that it does not provide sufficient incentive to local councils to develop their economies. I want to address each of those points in turn.
	I accept that the current system is complex, but the truth is that any system will have a degree of complexity if it is to take account of the differing needs and circumstances of different communities. That is why we have complexity in the system. The alternative would be to leave councils and communities to sink or swim, saying, “Right—you take what you can in council tax and business rates; the Government will not get involved at all.” I do not support that.
	Many of us, however, are in favour of as much localisation as possible, and, in principle, of allowing councils genuinely to benefit from business rate growth. However, those who put forward these proposals have an obligation to come up with a system that meets a number of tests. Those tests must determine whether the proposals will actually put more power into the hands of the councils, whether they will provide the right incentives, and whether resources will be distributed fairly. They must also determine whether councils will be reasonably certain about the money that they will get, and whether they will get the right help to enable them to meet local need and changing circumstances.
	The problem with the Bill, and the reason that we will oppose it tonight, is that it does not give the reassurance that many people are looking for on those five fundamental principles, either on local government funding or on the localisation of council tax benefit. There is no guarantee that any council will not be worse off, except in the first year. It is unclear exactly how much incentive will be offered. As my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) suggested, the Bill will replace one complicated system with another that is, in the words of London Councils, “fiendishly complex”. One might think that that body would be arguing strongly in favour of these measures, given its position on business rates. Lastly, the Bill will give the Government a huge amount of control over how the money is distributed and the how the system works, even though they claim that they want to devolve power.
	When we read the Bill, which is supposed to be about putting local authorities in charge, what is really striking it is the amount of power that it puts in the hands of the Secretary of State.

Ben Gummer: Will the right hon. Gentleman give way?

Hilary Benn: Will the hon. Gentleman bear with me for a moment?
	Under the Bill, the Secretary of State will determine the baseline for every local authority, including, in effect, what he thinks every council needs to spend. He will decide how much business rate income central Government will take and how much will be left with local authorities. He will be able to change the central share from year to year, and to specify the tariff or top-up payment for every local authority in England. He will also decide how much any council must pay him in levy in respect of disproportionate gains in business rate income—and he will decide what “disproportionate” means.

Kevan Jones: Will my right hon. Friend give way?

Hilary Benn: Will my hon. Friend bear with me for a moment?
	The Secretary of State will determine safety net payments, and decide how much of the remaining balance in the levy account may be distributed to one or more authorities. He will determine how much billing authorities must pay to major precepting bodies. He will designate pooling areas, and decide which groups of people must receive a council tax reduction. He will decide which classes of dwelling cannot be charged extra council tax, taking account of the characteristics and circumstances of any
	person liable—whatever that means. He will decide which areas are to be enterprise zones, and issue regulations to designate TIF areas. And in case all that is not enough, in clause 14(2) he gives himself a Henry VIII power that will allow him to amend, repeal or revoke any legislation he wants. That does not sound like localisation to me.

Kevan Jones: I agree with my right hon. Friend about the centralisation of powers. The one power that is being given away to local authorities is the administration of council tax benefit, where local councils will have the invidious task of cutting council tax benefit to individuals. The Secretary of State is basically giving away the unpopular decisions, making sure that local people get the impression that local councils and not the Secretary of State are to blame for the cuts.

Hilary Benn: My hon. Friend is absolutely right, anticipating one or two points I intend to make later in my speech.

George Hollingbery: The right hon. Gentleman really must make his mind up. On the one hand, he rejects a system red in tooth and claw; on the other, he wants the system to be incredibly fair. Can he explain by what mechanism he and his party would make the system fair, other than by some central interference?

Hilary Benn: I would merely say this. First, if councils had a choice between the system under the last Labour Government and the resources made available then, and the cuts imposed over the last two years and the system offered now, I suspect that they would say, “We prefer the old system.” Secondly, the Secretary of State argues that this is all about giving away power and responsibility, but I am pointing out—I can understand why the hon. Gentleman and his colleagues get irritated—the huge number of powers that he is keeping for himself to shape the whole system and how it works. Given that the Secretary of State has all this power, I gently say that I doubt very much whether the local authority begging bowl is going to disappear any time soon. The right hon. Gentleman has form on this, however. In his equally misnamed Localism Bill, he took for himself more than 100 powers. He says that he is passing down the levers of power, but the truth is that he is hanging on to them very tightly.

Ben Gummer: The right hon. Gentleman professes to be in favour of localism and to want to see it in local government, but he was a prominent member of the previous Government who for 13 years produced numerous White Papers, manifesto commitments, and the entire Lyons report, which took three years to compile—yet nothing was produced or brought before this House over that period to localise business rates. He nevertheless stands up here and complains about what is being done.

Hilary Benn: First of all, if we are talking about centralisation, the hon. Gentleman needs to think about who nationalised business rates. It was his party. Who was it who abolished London-wide government and who made a mess of the poll tax? In all honesty, I say that making a change in haste in the wrong way is done at one’s peril. The warning of that is provided in the poll
	tax. If we look back at the debates when the poll tax was being argued for, we find Ministers arguing that this was the most wonderful thing. The people who have really made a mess of local government financing in this country are the Conservatives. Local government would much prefer to have the resources they had under the 13 years of the Labour Government than what they are experiencing under the current Government.
	The point is this. It is not about whether we trust local councils or local communities. The question people looking at this Bill will be asking themselves—and, to judge by the consultation, they are—is whether they trust this Government and whether they trust this Secretary of State to use all these powers in a fair way. To judge by what has been done so far, there is not much room for confidence. We know that this Bill is being introduced at a time when local authorities are facing unprecedented cuts. Cuts do have to be made—[Interruption.] Well, I have said that on a number of occasions, but there is no excuse, no rationale and, so far, no justification for why these cuts are being applied in such an unfair way to communities.
	As the House knows, one shocking statistic from SIGOMA—special interest group of municipal authorities —tells us everything we need to know about this Government’s idea of fairness. It is the fact that the 10% most deprived upper-tier authorities are facing a reduction in their spending power that is nearly four times greater than that faced by the 10% least deprived authorities.
	Let us take just one example from figures produced by Newcastle city council. For every local authority, it looked at the cuts for 2010-11, 2011-12, 2012-13, transition and council tax freeze grant and the provisional new homes bonus allocations. The figures show that Basingstoke and Deane authority will see a cumulative gain of £6.30 per person, whereas Knowsley will see a cumulative loss of £227.35 per person. If that is not balancing the books on the backs of the poor, I do not know what is. What possible justification can there be for such unfairness? When I asked the right hon. Gentleman about it at Communities and Local Government questions recently, all he could do was bluster, so how can councils have any confidence that they are going to be treated fairly under the Bill, particularly for communities where there is a great deal of deprivation, communities with fewer opportunities for business rate growth and communities where a lot of people cannot find a job?

Marcus Jones: The right hon. Gentleman extols the virtues and fairness that there seem to be have been in the local government finance regime during the period of the Labour Government. Can he explain, then, why the gap between rich and poor widened during those 13 years?

Hilary Benn: That is not true in relation to local authorities such as my authority. For example, the number of children in poverty across the country was reduced by 600,000, while this Government is in the process of increasing child poverty, as the hon. Gentleman knows, so I am not taking any lectures from him about how to tackle inequality and unfairness.
	The truth is that councils are worried that under this Bill, as SIGOMA warns,
	“the gap between more prosperous and less well-off authorities will widen as a result of the policy”.
	Local Government Yorkshire and Humber fears that
	“the Government’s proposals are...likely to favour urban over rural areas and retail development over manufacturing growth…we could easily lose out.”
	Those are the concerns that the Secretary of State must address.
	Let me deal with the second argument we have heard—that the changes will incentivise economic development. Here, I have a request for the Secretary of State. It would be really helpful if he could clear up the confusion he has created about the Government’s view on whether local authorities want to see economic growth in their areas.
	I ask that because in paragraph 1.16 of his Department’s response to the consultation on business rate retention, it says:
	“We know that local authorities are keen to grow their local economies.”
	I agree with that, which is exactly what councils up and down the country want and seek. So can the right hon. Gentleman explain why the impact assessment published by his Department at the very same time on the very same day says the very opposite—that
	“local authorities are generally reluctant to....promote economic growth”?
	These are two completely contradictory statements—
	“keen to grow their local economies”
	in one document, and
	“reluctant to promote economic growth”
	in the other. They cannot both be true, so which one represents the Government’s view? I am happy to give way to the Secretary of State for him to explain. Well, there is no answer. It would be helpful if documents were read a bit more carefully before they were published.
	On the question of incentives, I note that business rate localisation—the term that used to be used—has now become business rate retention. No doubt that is because it has become clear that the Government will take a proportion of business rate income in the form of the central share payment. In effect, it will allow the Government to top-slice such income and, as the Secretary of State has said, to control local government spending.
	Before anyone on the Government Benches says that all that money will be returned to local government, the House needs to be aware that although that sounds good, the money is of course fungible across Government. Using that income from retained business rates to pay for other grants to local government will, in effect, create a saving for the Government because it will relieve the Treasury of having to find the money from elsewhere. So, in effect, we have set-aside by another name and in another form.
	We do not yet know what size of share the Government intend to take either in the first year or in subsequent years. Nor has any promise been made—I did not hear it tonight—that the share will not change from year to year. It is, in the words of the Local Government Association, one of the many detailed points that “remain unresolved”. As this is, in the main, an enabling Bill, we will not see that detail until later.
	Thirdly, I turn to the question of fairness. The Secretary of State is on record as saying:
	“we will ensure that no one will be worse off when the new system is introduced than they would have been under the old system.”—[Official Report, 18 July 2011; Vol. 531, c. 663.]
	That sounds reassuring, but it is only valid for twelve months. What about years 2, 3 and 5? Can the Secretary of State guarantee that no council will be worse off then as a result of the change he wants the House to bring in? These are really important assurances, for which councils are still looking. As the Secretary of State’s colleague Sir Merrick Cockell, chairman of the LGA, put it,
	“Reform must…ensure that those areas that do not have the capacity to raise huge amounts of funding through business rates do not lose out.”
	SIGOMA has asked why Ministers have decided not to restore resource equalisation to its 2010-11 cash level, which could have been used as a baseline for future grant allocation.
	What guarantee has been given to councils that the tariff and top-up mechanism will produce a fair result, especially given the coalition’s track record? Why do the Government think—or, to be strictly accurate, have the “aspiration”—that resets should happen only every 10 years? We think that they should be more frequent, as do most of those who responded to the consultation.
	What about the circumstances, which were mentioned earlier, in which councils lose a major employer, and hence business rate income? That is a very serious matter. How quickly will such councils be given help, how much will help will they be given, and how long will it last?
	What about the perverse incentives in the business rate system that encourage retail units and gyms more than manufacturing, and encourage warehouses employing few staff more than factories employing a large number of workers?
	Then there is the levy mechanism. Last July the Secretary of State told the House:
	“There will be no cap on the amount of business growth from which such councils can benefit. A council will be better off as a result of growth”. —[Official Report, 18 July 2011; Vol. 531, c. 663.]
	Yet the Bill gives the Secretary of State power to decide how much of any growth in business rate income a council can keep. He alone will decide what constitutes a disproportionate benefit. That is the reverse of the localisation that he promised. The retention of business rates is clearly not all that it seems.
	If the purpose of the levy is only to fund safety nets—and that is not clear—why does paragraph 28(1) of schedule 1 make it possible for only part of any surplus balance in the levy account to be given back to one or more local authorities? Does that mean that, in effect, a second top-slicing mechanism is being created by the back door?
	All that makes clear that no one can say at this stage what the incentive from keeping some business rate income growth will be. That is why London Councils said, in its briefing on the Bill,
	“'the business rate incentive is uncertain and unpredictable”.
	What is more, in some cases there could actually be a disincentive. Under the current system, if a council decides to engage in a big redevelopment and regeneration scheme in the centre of its town or city, such as rebuilding that centre, the loss of business rates for an extended
	period is not a problem, because it does not affect the resources that the council receives. Under the Bill, however, it could well be a problem. It may cause the council to conclude that it is not sure whether it wishes to proceed with the scheme, although the Bill is supposed to be all about encouraging growth.
	Let me now deal with the other main part of the Bill, which concerns council tax benefit localisation. It constitutes a step backwards towards a time when different areas gave different help to people in need. The big question is this: why are the Government making this change, and why, if they are determined to do so, have they not linked it to universal credit, as was suggested by many people in the consultation? The fact that they have not done that will lead to a great deal of confusion.
	Rent is one cost that people face in order to live somewhere, and council tax is another. In the first case there will continue to be a national scheme to provide help; in the other the national scheme is to be abolished, and councils will be left to decide what benefit should be provided. However, the Government intend to legislate to protect certain council tax payers, while at the same time imposing a 10% cut in the amount that goes to local government to meet the cost of paying the benefit. In areas where there is a lot of need—for different authorities have different needs and different circumstances —that will constitute an additional cut on top of the existing reduction in local authority resourcing of over 19% in the last two years.
	Because the Bill will rightly give continuing protection to pensioners, it is inevitable that, unless councils try to reduce benefit for those who are out of work, people who work but are on low incomes will be hit the hardest. Indeed, that is what the Government’s own impact assessment says. The House of Commons Scrutiny Unit has made an estimate of the impact of the 10% cut with protection for pensioners which suggests that non-pensioners—people of working age, whether working or not—will face an average cut of 16% in their council tax benefit support. Of course, in areas where the number of pensioners is higher than average, the cuts facing everyone else will be even bigger.
	The New Policy Institute, which has also looked into the effects of the cut, has found that five of the 10 hardest-hit local authorities are among the top 10 most deprived areas, according to the 2007 indices of multiple deprivation: Hackney, Newham, Liverpool, Islington and Knowsley. Meanwhile, according to the same indices, the two least affected areas, Hart and Wokingham, are also the two least deprived. Does that sound familiar? Of course it does. Once again, cuts are being imposed unfairly by the coalition Government. Moreover, the Government’s policy is completely incoherent. The Department for Work and Pensions says, “Hey! We want to make work pay!” but here is a policy that will end up doing the very opposite.
	The Secretary of State has a completely inconsistent attitude when it comes to protecting people from council tax increases. When he announced the council tax freeze in March last year, he declared resoundingly:
	“we are determined to protect hard-working families...This is about giving real and immediate help to families struggling with the daily cost of living.”
	Yet here he is now, proposing a policy that will result in a significant increase in council tax bills for some people, particularly those who work and try to do the right
	thing, but are on low incomes. Those are the people who he said, less than a year ago, that he was determined to protect, but now he wants us to vote for a measure that could, in some instances, wipe out all the benefit of the council tax freeze. Furthermore, the cuts are being introduced at the very moment when more people are going to need help with their council tax bills. Why? Because unemployment is rising. Why do we know that? Because the Chancellor has told us so.
	Costs could also rise because of increased take-up. What account have the Government taken of that—and what about higher unemployment? How are councils expected to cope with that? Given that they will possibly end up designing different schemes, there is a risk that people will decide to move from one council area to another because of the different levels of council tax benefit. And what about the collection costs? As the Conservatives learnt when they introduced the poll tax, when councils start trying to collect money from people who do not have a lot of money, they have a problem. People who are poor must make decisions about what bills to pay, and in what order. What assessment have the Government made of the practicality of collecting the money? What about all the other benefit changes that will affect the same group of people at exactly the same time? I hope that the Secretary of State realises that that when a lot of people discover that they are being hit with increases in their council tax—for that is what his Bill does—there will be a great many appeals. How much will that cost?
	Finally, there is the timetable for the implementation of the change. The decision to implement it from April next year was widely criticised by respondents to the consultation, and the Select Committee on Communities and Local Government has called for a delay to allow councils time to put their schemes, software and administration in place.
	We do not support this change, just as we do not support the Bill. It does not pass the tests of fairness, incentive, certainty, and helping councils to meet local need. It does nothing to deal with the unfair way in which the Government have imposed the largest cuts on the least well-off communities. The Secretary of State claims to be the great champion of localism, but he has presented the House with a Bill that gives him all the power to determine what happens, including the power to take and keep a top slice of business rates. No wonder the LGA said in its briefing for today’s debate:
	“That is not a localising policy and goes against the Government’s stated commitment to localism.”
	Say one thing and do another: that is the story of this coalition, and that is why the right thing to do is to reject this Bill.

Several hon. Members: rose —

Dawn Primarolo: Order. Twenty-six Back Benchers have indicated that they wish to speak in the debate, which is due to end at 10 o’clock, with the wind-ups starting at 20 minutes to 10. We shall therefore start with a limit of five minutes on each Back-Bench speech, from now on. There is nothing else that I can do to give more Members an opportunity to contribute to the debate.

Henry Smith: It was a great privilege to speak in last year’s Second Reading of what is now the Localism Act 2011 and to serve on the Bill Committee, but I always considered that legislation to be only a part of the overall programme of localisation that this Government are, happily, determined to introduce. In the financing of any system, the old truism still holds that he who holds the purse strings controls the power. The way in which local government is funded is an important aspect of localism. That is why I am pleased that we are completing early in this Parliament the process of radically shifting the balance of power in this country from central Government towards local government, local communities and individuals. The Localism Act was a significant contribution to that move, and this Bill completes it.
	For seven years I was a county council leader operating under the system we are seeking to remove. My right hon. Friend the Secretary of State rightly noted that, as the OECD has said, it is incredibly complex and completely lacks transparency. Worst of all, it is incredibly subjective. Ministers have therefore been able to use this complex system to fund parts of the country that they favour politically. I witnessed that several years ago when I was a council leader. The funding formula produced for West Sussex county council—an authority that covers more than 750,000 people and 770 square miles, and with a capital and revenue budget of about £1 billion—was an increase of just £6,000. At the same time under that formula, Birmingham city council received an increase of £12 million. West Sussex county council tried to find out how the funding formula was calculated, but there was a complete lack of transparency. The central Government Department did not want to tell the authority how it was worked out. We then invoked the Freedom of Information Act, and an obscure measure from 1947—the Statistics of Trade Act 1947—was used to explain why we could not be told what the funding formula was. The system desperately needs reform, therefore.
	I welcome the retention of the business rates scheme, which will localise business rates. Most people are perplexed about why business rates currently go straight to Whitehall in an inefficient way and are then inefficiently redistributed around the country.
	Gatwick airport lies within my constituency. It is a massive economic driver. It would be nice if we could keep all the business rates. If so, I do not know whether we could quite pave the streets with gold, but we could probably fill in a few potholes with gold. It is right to have a system whereby central Government can redistribute in order to support less economically buoyant areas around the country, but it is also right that we localise a large proportion of business rates and thereby allow local authorities to be much more responsive and to encourage economic growth. That is good not only for localism, but for economic growth in each local area—and therefore for the economic growth of the country as a whole and for our deficit reduction programme, which is so important to the well-being of the country.
	I wholeheartedly support the Bill. It is good for our local communities and for council tax payers. Finally, I thank the Secretary of State for working with our local authorities to freeze council tax for another year; it rose by 128% in Crawley between 1997 and 2010.

Clive Betts: I am a localist. I believe that this country is too centralist and that, in order to further localism, local authorities need to have more control over their own finances.
	In 2004, the Select Committee that I now chair produced a report on local government revenue in which it concluded that business rates income should return to local authorities, where it was raised. I have no problem in principle with measures that seek to give local authorities more incentives to encourage development in their areas and that allow them to retain more of the finance raised in their areas, but let us look at what the situation was in 2004. The components of local government finance then were council tax, which councils kept, and business rates, which were taken to the centre and then redistributed, and about one third of local government revenue came in the form of central Government grant and was distributed according to the resources of councils and their needs. Under the Bill’s proposals, there will be a fundamental change. When they are introduced in 2013-14 local government finance will, essentially, come from only council tax and business rates; the Government grant element will go completely.
	The Government therefore face a problem. They propose that the council tax will be left as it currently stands, so they have two objectives for business rates. On the one hand, they want local authorities to retain them so they can provide an incentive for development in their areas and have more control over their own financial futures. On the other hand, the Government want business rates to be used as a mechanism for redistribution—for taking from areas with higher resources and giving to areas with greatest needs. That is the fundamental conflict at the heart of the Government’s proposals. They are trying to do two conflicting things with the one tax of business rates.
	That is why the proposal is not for a simple retention by local government that everyone could understand, whereby money raised in an area is kept in that area. Instead, we have a complicated system in order to try to ensure that one tax addresses two conflicting priorities. That is why we will now have a complicated system, and one that further centralises power by giving more powers to the Secretary of State. This is centralised localism once again. The proposal fails to achieve what the Secretary of State says he wants, which is to ensure that authorities with great needs have the same amount of resources to spend as previously. All the information we have received suggests that authorities in the greatest need will lose out.
	I welcome the Secretary of State’s proposal not to put council tax into the universal credit, as I think it should be kept at the local level. My problem is with the 10% savings authorities are meant to make. Rightly, pensioners will be protected from many of the cuts that that 10% saving will impose. However, if authorities take account of the tapers under universal credit, so there cannot be reductions for those in work claiming council tax benefit, the total burden will fall on the unemployed of working age who claim council tax benefit. Up to 30% of their benefit could be taken away, and if unemployment rises there will be a further reduction in income so authorities will have to cut either other services or, again, the benefits of the unemployed who are of working age.
	There is a further issue. Council tax has been a stable source of income for local authorities over the years. It is not like a sales tax or an income tax, in that revenue from it does not tend to fall at times of economic difficulty. Now, however, for the first time local authorities will find that their main source of income, council tax, will go down at a time of economic difficulty. That will create instability at the heart of local government finance. The Select Committee looked into this issue. It is impossible to believe that bringing in a system in a matter of a few months—consulting on it, designing it, bringing in all the new technology required to implement it—will not result in any disasters caused by a failure to implement things properly, and such disasters will cause genuine hardship for people. I do not think this proposal can be delivered with certainty within the time period.
	People whose income changes will also find that they have to go to one office for council tax benefit changes and another office for housing benefit changes, which will add further confusion. The Bill does not take that into account.

Annette Brooke: As is declared in the Register of Members’ Financial Interests, I am a part-owner of a very small business.
	First, I welcome the general thrust of the Bill: to devolve greater financial powers and freedoms to councils, which is very important to me. On business rates, I believe the case for reform is overwhelming. The proposals in the Bill will move us away from a complex, non-transparent, centralised system, which offered no built-in incentives for councils to drive economic growth.
	Of course, it is difficult and I think brave of the Secretary of State to propose such a radical overhaul of the existing system, and it is easy to focus on all the fears, which have to be addressed in our subsequent discussions. In utopia—if there are such things as taxes there—perhaps we could draw up a system where all decisions are taken locally, where all business rates are retained locally, where there are real incentives for local authorities to promote economic growth, where there is a perfectly fair outcome for all, and where there are not unpredictable changes in business activity or devastating impacts from structural changes in our economy. I rather doubt that, but it is clear that in the real world we have to take a pragmatic approach and achieve a balance between the objectives of localism, fairness and incentivisation, while providing a safety net and transparency. Incentivisation must be balanced with protection of appropriate resources for all areas, especially those with the greatest needs. This needs to be done equitably, effectively and transparently for all.
	The Government have made the commitment that there will be a fair starting point, so that no council is worse off at the outset of the scheme. Tariffs and top-ups are proposed, but with provision for councils to benefit from growth in their business rates. Of course, the devil will be in the detail; we have a lot of scrutiny to do. There are safety net provisions, with a levy to tap into disproportionate gains. Personally, I would like to see local government playing a full role in operating these equalisation mechanisms, along with central Government.
	There is a need to provide clear incentives for individual local authorities to gain from additional local development, but I do have some concerns about possible unintended
	consequences. We have heard mention of the incentives to promote large warehouse developments. They will yield the business rates, but perhaps not the same incentives to promote SMEs. SMEs may well be more job-creating, which is all important for the local area. We have a great deal of careful scrutiny to do there in order to avoid such distortions.
	On set-aside, there is a degree of centralisation. It is a first step. In the longer run, I, as a Liberal Democrat, think there is a lot more scope for local decision making. Taking a purely localist view, the localisation of council tax benefit should be welcomed and I certainly welcome the theory, but I do have concerns about the practicalities. The 10% reduction in the overall budget and the centralised decision to retain existing benefits for pensioners, right as it may be, does put constraints on each council devising its own scheme. It also raises genuine concerns about whether it will be possible to protect all vulnerable groups of working age adequately.
	In order to implement a local scheme, each local council will have to use different software, so there are many practicalities that need to be looked at.
	On empty homes, there is a real opportunity to drive this agenda further than in the past. With 300,000 homes being vacant for more than six months, I am excited by the Bill’s proposal to go further than just giving more discretion to local authorities, and to introduce an empty home premium after a property has been empty for two years. One of my own local authorities is not very keen on this, arguing that an empty home cannot be defined. I am astonished by this response to the consultation—I thought we had gone beyond the days when we said what was furnished and what was not, and so on.
	I want to touch briefly on council tax, which is dealt with mainly in the consultation and not in the Bill. I welcome the fact that we can perhaps have a higher tax on second homes. Some 7.29% of homes in part of Purbeck, which I represent, are second homes. This issue is important, and I would like to examine the case for a second home premium, similar to the empty homes premium. I would also be interested in considering allowing the billing authority to keep some of the extra revenue. If we can do that for the business rates, which I welcome—obviously, in a two-tier authority the district council will be the driving authority—why cannot—

Dawn Primarolo: Order. I call Jonathan Reynolds.

Jonathan Reynolds: The Government’s promise today is that the measures contained in the Bill will encourage local economic growth, and in these times there cannot be a Member on either side of the House who would not back legislation that would do that. Over Christmas, many of my constituents told me that it already feels like the bad old days of the 1980s are back—and not just at the cinema. They want us, as a Parliament, to do something about it.
	Encouraging enterprise and enabling local councils to promote growth are good policies that I support in principle. I have always believed, particularly during my time as a councillor, that local authorities should have
	more tools at their disposal to tailor policies to their area. However, I am not convinced that the measures in this Bill will deliver these aims.
	At the heart of the Bill are plans to localise both council tax and business rates, but as time is limited I will concentrate on the collection and distribution of business rates. As we have heard, under these proposals councils will retain the business rates they collect, which will then be subject to a top-up or a tariff. Clearly, the Government intend that those authorities where the economy is booming in excess of expectation will benefit financially through the increased collection of business rates. As a result, residents in those areas may find their streets a little cleaner, the flowerbeds in the parks better stocked and their libraries open longer; but underneath those plans the cost of the better services in the booming areas will be met by areas where economic growth has faltered. In these areas, where deprivation and unemployment are increasing, councils will not benefit from the additional funding, no matter how desperately it is needed. It is these residents who will suffer the loss of vital council services as a result.
	The measures in the Bill are likely to lead to a growing divide between “winners” and “losers”, risking some areas spiralling into decline while others continue to grow. Already the Government’s own figures have shown that their spending cuts have disproportionately impacted on areas such as Greater Manchester. The unfairness was so pronounced that last year the Manchester Evening News began a campaign against it. The Government should have taken more notice of that campaign and campaigns like it.
	I understand that the changes in the Bill will use the already announced spending allocations from 2012-13 as a starting point for the new scheme, but in doing so they will build a system on unfair foundations. What the Government propose will exacerbate that unfairness. It is the job of the Government to mitigate the impacts of the recession, not compound them by leaving those in trouble to fend for themselves. I appreciate that the Bill does mention top-ups, tariffs and safety nets in order to prevent this, but there is no indication that these measures will be robust enough. In fact, there are no estimates as yet of the impact the changes will have on individual local authorities. I do not believe the Bill should be allowed to progress until there are stringent mechanisms in place to ensure equity in resource allocation.
	The Bill also fails to recognise that the actions taken by a council are not the sole determinant of economic growth in an area, no matter how effective it is. I am intensely proud of Tameside council, my local council, which has always played an activist role in the local economy. It has always been forward-thinking and willing to use the private sector or anyone else to try to make services better. Tameside is of course one of the 10 Greater Manchester councils that have worked together to develop one of the most successful systems of city region governance in the country: first, through the Association of Greater Manchester Authorities, and now the Greater Manchester Combined Authority. The Government should recognise that this successful collaboration, which includes councils under the political leadership of all the main parties,
	stems from an acknowledgement that the authorities in a city region must have strategies that are complementary, not competitive.
	Successful business growth in the centre of Manchester is good for my area, because the people who work in those businesses may move out to Stalybridge or Hyde, where they will get a bigger house and more open countryside for their money. However, if we localise the business rate in the wrong way, that collaboration is broken, to the detriment of everyone concerned.
	Greater Manchester’s councils are among the most innovative in promoting business and growth on a local and regional basis, but successful as they are, they are not the sole determining factor of economic growth in an area. Indeed, official figures from SIGOMA, reported in the Financial Times last week, suggest that 80% of the factors relating to promoting business growth in a given area are nothing to do with local government. Particularly in this era of economic difficulty, there are factors that impact on local economic growth that are way beyond the control of local councils. Implementing a system that would penalise hard-working and innovative councils when external factors come into play would be wrong. The Government may feel they are justified in recognising economic growth in this way, but if they are rewarding areas for circumstances beyond their control, this is no more than a lottery.
	We have very little time to discuss this important Bill today. Those who are not involved in local government finance may consider it an unimportant technicality; however, it will have a serious impact on our local authorities, and I will vote against it today.

Andrew Bridgen: I welcome this Bill as yet another example of this Government’s commitment to localism, private sector business growth, local democracy and local accountability. For too long, councils have not had sufficient incentive to drive business growth in their boroughs and districts. The proposals will mean that councils that have been unwelcoming to the private sector and job creation, or even those that treat the private sector with antipathy, will be found out. They will be answerable for their actions or for their inaction, and will risk punishment at the ballot box, where they will rightly be held accountable by their electorates.
	At this point, I should declare an interest. Nine years ago, I relocated my business. I wanted to grow the business and create more employment in a district which is now the constituency that I represent. The unhelpful nature of the then Labour-controlled local authority meant that the project took eight years—it took eight years to go through planning and construction, and the issue was resolved only when it dropped on Tony Blair’s desk as the worst case of red tape and bureaucracy holding back a small or medium-sized business in Great Britain. Since the eventual relocation, in 2003, the company has created more than 150 new jobs for the district, and has paid just under £3 million in corporation tax and £1 million in business rates. We will never know how much more the company could have done if it had not been so mired in bureaucracy for so long. Happily for residents and businesses in North West Leicestershire, the district council is now Conservative-controlled, and has been since 2007, and only last week, I was discussing
	with the council leadership how the authority will be focusing this year on creating jobs and business opportunities in our district.
	If we examine the words of the shadow Secretary of State today, we find that they reveal the real beliefs of the Labour party about business and democracy, and go some way to explaining why Labour is not supporting the measures in the Bill. Interestingly, the Opposition now agree with the need for reform, but that raises the question of why they failed to act for 13 years in government. The facts suggest to me that they ignored the need for reform because of the central command and control that the current system gives the Treasury or, alternatively, they simply did not have a clue what do—perhaps it was a combination of both. What I would say is that we need to move away from the dependency mindset in local government, which leads to councils investing much of their effort in lobbying central Government for funding by demonstrating deprivation. Instead councils should be investing in local growth, in a system where they can raise more than 80% of their revenues locally, which gives them a tangible stake in supporting local shops and local enterprise. Such an approach is in stark contrast to the command-like structure that the previous Labour Government favoured. The shadow Secretary of State has said:
	“The proposals don't sufficiently incentivise councils to get growth going”.
	Yet Labour left a legacy of no incentive for local councils to go for growth, and so the stance could be construed as hypocritical.
	Another concern that the shadow Secretary of State expressed was that there is no guarantee that some councils will not lose out, and so we get to the nub of real Labour party thinking. I believe that Conservative-led councils will do rather well out of this policy, but that is not because the proposals give an unfair advantage at the beginning. The starting point has been explained, and it is transparent and fair. Councils will have a set baseline and those already above it will pay a tariff to the Government, while those below it will get an individually assessed top-up from the Government. So it is fair to say that all councils will start on a level playing field. I would therefore say that a fear of democracy, transparency and a loss of central control is driving the Labour party’s opposition to this Bill. In a nutshell, the current system encourages councils to take part in a race to the bottom in order to get funding, whereas our proposals will incentivise a race to the top.
	I warmly welcome this Bill as another step towards creating the growth we need to deal with both the financial and democratic deficit left by the previous Administration. This Government are proving, yet again, their commitment to devolving decision-making powers to local people and making them both responsible and accountable for their actions.

Nick Raynsford: First, may I draw attention to my interest, as declared in the register?
	The Bill speaks volumes about the Government responsible for introducing it. First, it is largely incomprehensible, and I challenged the Secretary of State, when he was in his place, to explain, in plain English, the meaning of the first seven clauses. Of course he immediately had to rush to get a copy of the explanatory
	notes, which he read out in a rather tedious way, because it is impossible for the lay reader to understand the clauses. They are phrased entirely in terms of amendments to existing legislation. Interestingly—this is perhaps why he was unwilling to rise to the challenge—the very first piece of legislation referred to, in clause 1, is the Local Government Finance Act 1988. Some people will know what that was—it was the Act that introduced the poll tax. So the people responsible for the poll tax are back with us again, only this time they have the Liberals on board with them.
	The Bill is incomprehensible as legislation and it is contradictory in that its effects will be very different from what it claims to do. It talks the language of localism but, as my right hon. Friend the Member for Leeds Central (Hilary Benn) ably pointed out from the Front Bench and as was equally highlighted by my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Select Committee on Communities and Local Government, it is actually a deeply centralising measure that gives huge powers to the Secretary of State to determine what amounts of local revenue can be retained by individual local authorities and, crucially, how much will be clawed back by the Treasury. One of the key provisions, which the Chair of the Select Committee highlighted, is the erosion of grant support from the Government to local authorities. The main source of revenue to local authorities will now be business rates but authorities are not even going to have the benefit of retaining all those rates because of the claw-back provisions in the Bill. The Bill is a deeply flawed, centralising measure that does not do what it says on the tin; it covers itself in the language of localism but is a profoundly centralising measure.
	Let us address the part of the Bill that deals with council tax benefit, which is a nasty little piece of legislation and which does not just cut 10% from the benefits of people who depend on this for support with the cost of their council tax. There are large numbers of these people—almost 6 million—and, on average, they are getting about £15 a week, or £800 a year. A very large number of vulnerable people depend on this revenue, some of whom will have all of it taken away and some of whom will have some of it taken away. We do not know what the consequences will be, because the Government have not yet set out the detailed rules. Therefore, local authorities, which are expected to introduce the provision in just a year’s time—they are to have the scheme in place by the end of January 2013—do not know how to begin to plan the scheme because they do not know what the Government’s reserve requirements are.
	I must say to the Government that the approach being taken is horrifyingly reminiscent of another disaster of the 1980s: the introduction by the then Conservative Government of housing benefit. The Conservatives like to forget or obscure the fact that it was the Thatcher Government who introduced housing benefit and were responsible for the scheme which Conservatives are now attacking, criticising and saying needs reforming. Its introduction was done in just the same way that the current Government are proposing to introduce these changes: in a rush, without adequate consultation and with a lot of the detail unavailable until very much the last minute. The consequence then was administrative chaos, which was described by some of the country’s most respected newspapers as the
	“biggest administrative fiasco in the history of the welfare state.”
	I have to say to this Government that they are on track to repeat that experience now. They are rushing ahead with a highly complex scheme without giving local authorities the time to prepare properly, and they are going to do it in a way which imposes steep cuts and therefore affects the living standards of people who depend on this benefit for their welfare. The approach is profoundly irresponsible and I sincerely hope that the Government will at least use one of the powers that they have given the Secretary of State in this Bill and, by order, amend the date on which this scheme can be introduced. I sincerely hope that they will listen to the good advice of the Select Committee and defer what otherwise promises to be an administrative fiasco that will cause immense hardship.

Ben Gummer: It was said at the beginning of the debate that we live in one of the most centralised states in Europe, if not the world. Only Malta, according to the Government, has a more centralised system of local government. The Netherlands, in my understanding, is the only other country that collects less of its tax locally than Britain. That is bad not just in itself but because it goes against the Government’s stated objectives of localising as far as possible, not just down to local government but from local government to communities, from the European Union to national Governments and so on.
	The shadow Secretary of State, the right hon. Member for Leeds Central (Hilary Benn), put the debate in the context of Layfield and the broader history of local government finance, and correctly so, but we cannot speak about local government and its relationship with business without thinking about why we have many of our local authorities and why they were successful 100 years ago or 150 years ago in creating the great towns and cities that many of us are profoundly lucky to represent.
	The hon. Member for Stoke-on-Trent Central (Tristram Hunt) has written eloquently on this subject and I feel that, as he sits on the Opposition Benches, we almost have the ghost of Joseph Chamberlain with us—a man who showed that the union of business and local authority, through municipalism and corporatism, could create urban spaces that were good for every type of person in that authority, creating wealth, prosperity and growth and the great civic buildings of our towns and cities. That approach created the urban growth that made wealth and prosperity possible in the latter half of the 19th century, with the first great slum clearances, the provision of a good water supply and all the things on which we still depend today.
	The way in which we have gone from that position to where we are now, when, if we are honest with ourselves, councils represent in many cases a desiccated, demoralised and often moribund arm of the state, is a profoundly sorry story and one for which responsibility is shared, as the shadow Secretary of State so correctly said, by Governments over many years. It started a long time ago, in 1835, which was the first time that central Government took a precept from local taxation. Even by the 1870s, 90% of taxation was still raised locally and that figure did not fall beneath 70% until the 1950s. The decline fell to the point at which, between the period covered by 1993-94 and the 16 years that came
	afterwards and 2011, there were only two years when 50% or less of the funding was provided by central Government. The result is threefold: we have a declining calibre of councillor and officer from parties represented in every part of this Chamber; we have a rupture in the relationship between business and councils that has stifled economic growth, especially in our provincial towns and cities; and we have falling participation and democratic interest from the electorate.
	The Bill does an enormous amount to start to turn the clock back to a position in which local authorities have responsibility for growth and can reap the benefits of seeing businesses start up, employ people and create prosperity and wealth in their areas. Importantly, it also includes the downside risk, and this is where I welcome the Government’s reform of council tax benefit. Councils must feel the heat under their feet that will caused by the fact that if they do not get local economies going, they will have to bear the consequences of dealing with the result, which is joblessness. It is important that they do everything in their power to ensure that companies can prosper and employ, creating jobs and growth.
	The much-stated aim of councils is that they want to work with businesses, but frankly, as we know, they often pay just lip service to that. I ask the Government to look even further at tax competition between local authorities, so that we can have a genuine fight for jobs, prosperity and growth in the towns and cities across our country.

John Healey: The Bill brings about the most fundamental change in local government funding since the poll tax. Like the poll tax, it is a big change that is being forced through too fast and, like the poll tax, there is no consensus of support behind it. This reform and this Bill build in unfairness like a ratchet.
	At the moment essential local services are funded on the basis of need. After this legislation is passed, they will be funded on the basis of the ability to raise tax and pay locally. Ninety years ago, 30 councillors from Poplar went to prison to establish the principle of equalisation in local government funding. That equalisation means that we now have a system of funding that enables each council to provide services to residents to a similar standard. That is why the current formula for grant to local councils takes into account population, need and the capacity to raise funds through the local council tax. It takes account of the fact that there are more than three times more looked-after children in Newcastle than in Surrey. It takes account of the fact that Bexley and Barnsley have similar populations, but Bexley raises more than £37 million more in council tax each year than Barnsley does.
	The Bill ends the equalisation that George Lansbury and his Labour councillors in Poplar fought for just after the first world war. With council tax frozen or capped by referendums, the increased funding for increased spending and increased need must be met through increased business rates. The problem for the future is that the opportunities to grow the business rate are unevenly spread across the country, as is the business base. Kensington and Chelsea has a smaller population than Barnsley or Rotherham, yet it raises more than three and a half times the business rates of Rotherham and more than five times the rates that we raise in Barnsley.
	The local government finance system is, as the Secretary of State said, complex and incomprehensible. The Bill will make it more complex and less comprehensible. It has, in my view, four big flaws. First, from year one the gap between affluent and less affluent areas will grow. The affluent areas with the higher business tax base start with an advantage that will just get bigger and the system of tariffs and top-ups will reduce but not remove those disparities as otherwise they would remove the incentives to grow, too.
	Secondly, the idea that the legislation will localise business rates is largely an illusion. As my right hon. Friend the Member for Leeds Central (Hilary Benn), the shadow Secretary of State, said so clearly, some of the most critical decisions about how the system will be designed and operated will be made by central Government and not local government.
	Thirdly, local government’s certainty about funding for the future and therefore long-term planning will be badly undermined by the new system because business rates income is volatile and hard to predict. The Secretary of State’s decisions about the design of the system will, it seems to me, inevitably have to be made annually, undermining the ability of local government to plan for the long term.
	Fourthly, business growth is not the same as business rates growth, so the incentives to councils to see and support the economic growth of their area might prove to be weak or even perverse under the new system. Business rates are levied on buildings—the bigger the better—so supermarkets, gyms and warehouses are good, but small starter units with high-tech design and manufacturing are bad.
	Finally, the changes this Bill makes to council tax benefit are a hospital pass to local government. Many people in Rotherham benefit from that support by about £15 a week. That will be cut by £2 million in 15 months’ time, and although pensioners will be protected, other groups will find the cut is even bigger. This is a bad Bill and we must oppose it.

George Hollingbery: I should like to draw Members’ attention to my entry in the Register of Members’ Financial Interests.
	It is a challenge to follow the two very thoughtful speeches of the right hon. Member for Wentworth and Dearne (John Healey) and my hon. Friend the Member for Ipswich (Ben Gummer). The historical context they gave is very useful, but I cannot help but be persuaded that localising business rate collection and incentivising local councils to grow their own areas in terms of the economy has to be the right thing to do. I met the cabinet of Havant borough council, which is not a wealthy council by any manner of means, on Friday to explain the implications of the Bill, and those members were genuinely excited by what they heard. They said, “That means we are going to have to rethink everything we do. No longer are we going to be pleading for funding—we are actually going to go out there and find it for ourselves.” That is an exciting development.
	I particularly welcome pooling. The Select Committee on Communities and Local Government, under the chairmanship of the hon. Member for Sheffield South East (Mr Betts), went to Manchester. There is a huge appetite in that part of the world—and, I suspect, in
	many other large metropolitan areas—to see private, local and locally generated ways of creating regeneration. Given the lack of central funds at the moment to promote more regeneration, the pooling of business rates, of ideas, of enterprise zones and of TIFs across a whole local area creates a genuine way forward. That is another reason why I am excited by the proposals.
	On TIFs, there was some disagreement among those who replied to the consultation about options 1 and 2 and about enterprise zone issues. Should we have small limited schemes that are not subject to the tariff and top-ups regime or should there be ring-fencing to ensure that longer-term schemes can be put together? The Government listened and both those options are available. Clearly, option 2 could create a drain on the overall business rates pool and might therefore have to be limited. I think we all understand how that works. Likewise, we need to be able to have a more flexible, shorter-term version of the TIF pool to ensure that smaller local councils, perhaps in better financed areas, can also get shorter-term projects enabled. That is why I welcome the flexibility being built in.
	On empty properties and second homes, it is right that people who own second homes should pay full council tax. After all, they rely on the value of their houses being backed up by an enabled local council that allows rubbish to be taken away and planning decisions to be made. It therefore seems quite proper that they should be asked to make a full contribution to the rateable value of their houses. I also strongly welcome the potential to charge those who have long-term empty properties in their possession a premium on council tax. Given that there are 400,000 long-term empty homes in Britain, the Government must do everything they possibly can to get those houses back into occupation.
	I want to spend a little more time on the issue of council tax benefit localisation, with which I have some issues in principle. I was on the Welfare Reform Bill Committee and it seemed unusual to me to single one benefit out of all the benefits being put into universal credit and put it to one side. That made no great intellectual sense to me. I understand that there is a perfectly reasonable argument about localisation and about local councils being able to create local schemes for their local areas to reflect local circumstances, but this issue added another layer of complexity and it came out of a Bill that was meant to create simplicity. For me, the argument did not stack up. However, we are where we are.
	I have some questions for the Minister to answer later today or in Committee. Is there any reason why we should not have an official pooling of council tax benefit schemes across my area in Hampshire, for example? Why cannot all district councils in an area get together to create some sort of agreed pool? That would allow some flexibility in under-collection and over-collection and would stop some of the perverse incentives that there might be in the scheme that would push people, particularly those in social housing and where there is a joint housing register, to move into one of the areas on that register. There is a potential problem with this issue and a county-wide scheme in two-tier authorities might be very useful.
	On parishes, I noticed in the response to the consultation that in chapter 5 there had been some discussion about parishes. If there is to be a grant to local government to be distributed as a council tax discount, what will be the
	status of parish council precepts given that they are not part of the same authority? Will there be a legal system by which parish councils can be compensated for the lack of collection of council tax? I am not sure that has been wholly resolved. In my part of the world, certainly, this issue will be very important.
	Finally, discussions on clause 107 of the Welfare Reform Bill suggested that the single fraud investigation service would deal with all benefit investigations. That is on the record in the Hansard of the Bill Committee’s proceedings. However, chapter 8 of the consultation document and response suggests that this will now be the province of local councils. I would welcome some clarification on that.

Alison Seabeck: I draw the House’s attention to my indirect interests in the Register of Members’ Financial Interests, as previously stated in other debates.
	The Bill covers a number of areas including the non-domestic rating of council tax with specific reference to changes to council tax benefit and additional taxation for empty homes. I should have liked to spend more time on the empty homes proposal but unfortunately time does not allow that. I will simply say that although sticks are welcome, the clauses on this issue are poorly drafted and will leave opportunities for smart operators to find their way around the additional charge. For example, the allowance that the property must be substantially unfurnished could leave considerable room for argument.
	On the section relating to the localisation of council tax benefit, the Government might package this as being about passing down powers to councils, but the reality, as my right hon. Friend the Member for Wentworth and Dearne (John Healey) said, is that it is a hospital pass to many communities and that the Secretary of State would continue to pull many of the strings. Cuts will come—there is no doubt about that—because if the pensioner element is effectively protected then, as we have heard, the 10% reduction in income will have to be shared out among the remaining groups.
	In Plymouth, about 25,000 people are currently in receipt of council tax benefit. Of those, a significant number will have a child dependant, will be single people in low-paid work or will be disabled, but there is no mention in the Bill of protection for people with disabilities. This reform is dressed up as providing discretion and choice, but all it will do is localise cuts and target pain on those who are least able to cope. Unless Plymouth city council can find the money from elsewhere in its budget to make up the lost 10%, it will have no choice but to cut the amount paid to people or to find cuts from other services that have already taken quite a hit and that will see further reductions in the coming years of the current comprehensive spending review.
	Plymouth has also seen an increase of over 36% in the last five years in the take-up of council tax benefit, as compared with an England average of 25%. Answers given to Members of the House who have asked parliamentary questions reveal significant disparities in take-up in different areas, and I am not clear from the documents that I have seen that the Government have taken that into consideration. What protection would
	be offered if in Plymouth, hypothetically, the dockyard failed and the naval base closed, after the scheme had been established by the individual authority? How would it cope with the additional council tax benefit burden and the loss of business rates—a double whammy, and at present with no specified safety net? We have talked generally about a safety net; the detail is not there.
	Where will the baseline for these changes be set? Is it possible that it could have perverse outcomes if set in the wrong place? What assessment have the Government made of the potential cut-off points, and are those public? Can the Minister answer the SIGOMA queries that we have heard in the debate? This is complex territory and it is not an area where things should be rushed through, unless we want to see further delays to this legislation as it starts to unravel under scrutiny. I am sure the other place will take a close interest in that.
	On business rates, does the Minister not accept that we could see a postcode lottery on a grand scale, where services vary markedly from one authority to another, which could threaten the very ability of some councils in areas of low economic growth to deliver necessary services? That, of course, leads to a downward spiral in those areas, which certainly would not be attractive to inward investment.
	What is the role of the local enterprise partnerships in all this? None of that is clear, particularly in relation to pooling, as we have heard. Will the pooling arrangements be allowed to cut across LEP boundaries, and if so, how and where does the risk lie? They will certainly have an interest in that. The hon. Member for Ipswich (Ben Gummer) talked about councils feeling the fire at their feet, but does he understand what will happen if one of the other Government Departments does not do its job? Let us take transport for example and look at the far south-west—how will those local authorities be able to invest in new roads, new rails, new airports? They simply cannot do it. It is unfair. The Bill is not about local choice; it is about local cuts.

Iain Stewart: I shall focus my comments on the business rate proposals, and I should like to share with the House the example of my local authority, Milton Keynes council, to show how the Bill will benefit growth and help deliver better infrastructure in the local area.
	At present, Milton Keynes loses out pretty badly under the current system. According to figures that I got from the Library this morning, in the current financial year businesses in Milton Keynes are due to contribute £132.5 million in business rates, yet Milton Keynes authority will get back about half of that—just under £70 million. Opposition Members may think that Milton Keynes is a very affluent place, part of the golden south-east, but there is fairly significant deprivation and very often we lose out in our share of the funding formula, be it for local authorities or for the health service. What we want is our fair share. I quite accept the principle of fiscal sharing of revenues across a country; any western country has that. The more affluent areas will contribute more to help those that are less so. I am not saying that we should move away from that principle, but the history of Milton Keynes shows that we have not had our fair share over the years, and I very much welcome the proposals that will give us that fair share.
	Milton Keynes is a fast-growing area; it has developed enormously in recent decades, but I do not believe that in terms of business growth we have realised our full potential. Certainly there has been huge housing growth in recent years, but that has not necessarily been underpinned by the necessary business growth and the necessary infrastructure to support those new houses. The measures in the Bill, coupled with those that have been introduced by the Localism Act 2011, will make us more masters of our own destiny, and I think in my local area we will seize that opportunity, and help develop Milton Keynes and grow it into what we want it to be.
	The measures on business rates are warmly welcomed by the local business community. This morning I was in contact with Colin Fox, the new chief executive of the local chambers of commerce. He endorsed the view that local businesses very much support them, and that they want business to be a genuine partner of the local authority in boosting growth and developing the infrastructure that underpins that business growth in the future. I believe that, whatever mechanism the local authority has to work with business, that should be decided by the local authority. There is potential for a very good partnership to develop our local place.
	I finish by giving just one example of how I believe the Bill’s measures can work, particularly the power that it will give to borrow against future revenue streams, which is not currently permitted. Just before Christmas, the Chancellor announced the building of the east-west railway line, which will go through my constituency—a very welcome announcement. One addition to that which is not currently part of the scheme but which some people locally have promoted is the building of a rail freight terminal in Milton Keynes to encourage more transport of freight by rail rather than road. If the local authority could borrow against its projected business rate revenue, it would help develop that project and enhance the scope of the scheme that is already in place and is already worth while. I offer that up as one example of how the measures could really drive the local economic growth that we all want to see, and I am very happy heartily to endorse the Bill.

Tristram Hunt: It is a great pleasure to follow the hon. Member for Milton Keynes South (Iain Stewart).
	I am instinctively in favour of some of the reforms that we are discussing. Undoing the damage which the previous Tory Government did to local authorities always seems to me a good idea. It would have been nice to hear a slightly longer and deeper apology about John Major’s decision to nationalise the business rates, but we cannot have everything.
	The reason why I am instinctively in favour of the thinking behind the Bill is that the past 100 years have witnessed, as the hon. Member for Ipswich (Ben Gummer) suggested, a relentless emasculation of local government power and autonomy. As this place has found less and less to do with questions of war, empire and global affairs, it has concentrated on and interfered relentlessly with the powers of local government, most of all in the field of local government financing.
	Perhaps you will allow a little history, Mr Deputy Speaker. The great age of local government—of municipal socialism, of gas and water socialism—was the period
	1870 to 1914. This was when our great urban centres were civilised: Birmingham, Glasgow, Manchester, Stoke-on-Trent and even London under the London county council. This was the age of museums and parks, town halls and swimming pools, schools and hospitals. There was a widespread belief in the virtue of local government and its capacity to deliver real change for the life chances of the poorest in Britain. The London county councillor and dockers leader John Burns described “a revived municipal ideal”, the goal of which was
	“to do for all what private enterprise does for a few. It is the conscious ordering of the city, through ownership of public services, of its own comfort, happiness, and destiny”—
	in fact, pretty much everything that this Government are opposed to.
	But of course this cost money. There was extensive borrowing by local authorities—I welcome provisions to allow for extra borrowing by local authorities—and there was expenditure. In 1905, local authorities accounted for more than 50% of total Government expenditure, a figure which has come down to around 18% today, a clear indication of the decline of local authority power. We are all guilty in that process—inter-war demands for national efficiency, post-war demands for centralisation, demands for rationalisation in the 1970s, and privatisations in the 1980s.
	At the heart of this story is finance. The capacity of local authorities to raise funds and be responsible for their allocation has been crippled. Today far too many local authorities seem overly dependent on car parking charges, for example, rather than any other income stream. This is in stark contrast to the situation in America and on the European continent. The lack of a plural funding base has undermined our councils’ ability to deliver for local communities, and made them overly dependent on the decisions of Whitehall, rather than town hall. So councils need the power which comes from financial autonomy, all of which makes the Bill so disappointing.
	On the issue of liberty and equity, on the freedom of councils to act, as set against the broader need for social justice across the country, the Secretary of State’s Bill fails. The Government’s system of tariffs and top-ups will see a wholly unacceptable loss of income for those local authorities with less business rate income than their peers. This is, Mr Deputy Speaker, as you will know, a north-south issue. We have spoken of Knowsley v. Basingstoke, of Bexley v. Barnsley. On the Government’s plans—for all their talk of recouping disproportionate incomes—there will be a massive boon for high-performing cities in the south-east and marked loss of incomes for struggling cities in the north.
	What is more, the reset mechanism and support funds do not properly account for the loss of a major employer—a dock, for example—and as we have heard, there are perverse incentives in the business rate model that encourage services over manufacturing when we are meant to be rebalancing the British economy, and large square-footage over intensive employment.
	It is even unclear from the Government’s own ambitions how these plans will stimulate growth when the Treasury top-slice takes away the incentive. It is uncertain, it is unpredictable and it is fiendishly complex. This will not benefit Stoke-on-Trent, which we all want to see benefit from Government legislation. In fact, it will be hard hit
	in the ensuing years, which is why I urge Ministers to think again about the Bill. We believe in some of its propositions, but I will be voting against it.

Marcus Jones: I give my broad support to the Bill and its Second Reading this evening. It will enable the start of the journey away from central control of council funding, and will give councils more autonomy both to raise local funding and to set spending on local community priorities, rather than the perceived priorities of Whitehall. Pursuing the latter over a number of years has created a perverse system whereby councils have constantly been looking to the next Whitehall initiative and the next Government grant. That system has let down some of our most deprived communities, as despite external and formula grants increasing in real terms for more than a decade from 1998 onwards, the gap between rich and poor actually widened during that period.
	In the scramble to get funding into local authorities, those prescriptive grants would quite often not match the priorities of an area, of if they did, they would often overlap with the current authority provision because the grant criteria could not be tailored to local need. Services could often not be integrated, leading to very poor value for money and a continuous bolt-on of services, which councils then had to make very difficult decisions on, in terms of deciding whether to retain them or not, once the grant funding from Government expired. Pursuing the former and moving away from a central grants system will allow councils to make clearer long-term decisions based on the priorities of the communities that they serve.
	I wholeheartedly welcome the mechanisms in place in the Bill to ensure that no council is worse off at the outset of the changes. That, together with a system of top-ups and tariffs, will ensure fairness. I also welcome the concept of the retention of future local business rates. I believe that that will make councils, particularly planning authorities, think far more carefully about creating a good mixture of commercial development and housing in their local plans. Many of my constituents feel that any plans for new housing must be matched by the creation of new employment to ensure that communities are sustainable and cohesive, and not just commuter belts for the larger conurbations, with poorly thought out, over-intensive housing developments.
	It is also vital that the Government address the problem of empty dwellings, which the Bill does. As a Conservative I am a firm believer in a property-owning democracy and therefore the right of an individual to use a property in any way they wish within the rule of law, but I am acutely aware of the situation that we now face with huge numbers of long-term vacant properties—nearly 280,000 in England last year alone—and the councils covering my constituency have 1,100 such properties. With such a housing shortage, and with the proposal of new housing developments across the country, it is morally right that we try to correct the failure of the market in this case and get those long-term empty properties back into use. Therefore I welcome the Government’s move to allow councils to charge additional council tax where a property has been vacant for more
	than two years. That, together with the incentive to get existing properties back into use through the new homes bonus, will have a hugely positive effect on getting our properties back into use.
	There are many more matters that I would like to speak about in some depth, but I will not do so on this occasion. I welcome the fact that the Bill will come before a Committee of the whole House rather than a Bill Committee, which will give Back-Bench Members an opportunity to raise their concerns about some of the minutiae of the Bill at that point.
	The Bill aligns with the coalition agenda to move communities from a culture of dependency to one of greater-self reliance, but provides the safety net to bridge the gap where communities have the problems that make it difficult to achieve that self-reliance. I will therefore support the Bill this evening.

Heidi Alexander: Given the time constraints, I will focus my remarks on part 1 of the Bill, which deals with local business rate retention. I have concerns about the localisation of council tax benefit, but I will save those for another day.
	Earlier today we had a lecture from the Secretary of State on how councils need to be financially incentivised to encourage business growth and start-ups. We were told that the current arrangements, whereby central Government redistribute national business rate income to councils based on local need, is a complex and opaque system that does little to encourage an authority to foster economic growth. But the reality is that the partial business rate retention scheme that the Bill proposes will simply replace one complex system with another. It will not boost economic growth as the Minister claims. It is the wrong policy at the wrong time.
	The idea that a council’s ability to fund child protection or elderly care should be determined by the number of businesses it boasts is not right. The idea that councils will act to improve their area’s economic fortunes only if they stand to gain some direct benefit for their coffers is insulting, and the idea that this policy is the correct one at a time when businesses are paying off debt rather than investing in new facilities goes to show how desperate the Government are. I am not suggesting that councils do not have a role to play in local economic development—far from it—but I am realistic enough to know that the actions of an individual council will only ever be one part of the jigsaw.
	Let us take Lewisham as an example. Lewisham has one of the smallest business bases in London, as 70% of its working population leave the borough every day to go to work. The police station in the heart of the town centre is the borough’s ninth largest business rate payer, the other large rate payers being supermarkets and schools. It is a densely populated residential borough. There are pockets of prosperity, but there is also high unemployment. Before becoming an MP I was Lewisham council’s cabinet member for regeneration. Despite what Government Ministers might think, I did not sit around twiddling my thumbs and thinking that if only we could retain growth in future business rates we would do X, Y or Z to stimulate development. Funnily enough, I remember doing quite a lot to try to grow the local economy, not because it would mean money for Lewisham council, but because it was the right thing to do for Lewisham people.
	A huge amount has been done to try to stimulate local economic development, but Lewisham’s business rate growth over the past few years has been modest, from a small base. The biggest business rate payer is a media company based in offices above Lewisham’s bowling alley. It is paying £2.8 million in business rates this year, an increase of over £2.7 million from the £80,000 it paid in 2008. Why the sudden growth? What did Lewisham council do to encourage that growth? The honest answer is very little. The business did not undergo development, expand its occupation or intensify the use of its site. Basically, the company had to pay business rates on the fibre-optic cables it had laid across London. Its offices in Lewisham are the biggest it has in London, so Lewisham collects the £2.8 million. What does that experience tell me? It exemplifies how an increase in business rate income may have very little to do with the actions of the local authority and that, although economic growth might be encouraged by a council, unless a range of other positive factors coalesce, businesses may not grow and start-ups may not emerge.
	Old Street’s silicon roundabout was always more likely to develop in Old street than, say, Catford. Why? Old Street is on the tube map and Catford is not. Extend the Bakerloo line to Lewisham and on to Catford and we might have more of a chance. Even if we regenerate Catford town centre, would we be able to woo those high-tech start-ups from Shoreditch? I suspect not, because businesses like to locate next to other similar businesses—the agglomeration economies we all learnt about in our geography lessons—and success breeds success.
	I believe that councils have differing potential to attract and grow business in their areas, and I do not understand why that gives local authorities the right to grow their resources in order to be able to provide extra services to their local population. The factors that determine growth in an area’s business rate income will sometimes have little to do with what a council is or is not doing. It will never bear any relation to the number of elderly people who require care packages or the number of children who require child protection plans. Linking the two, albeit through a convoluted system with all manner of supposed checks and balances built in, does not seem right to me. I cannot help but think that this is another case of the Government trying to pass the buck and shift the blame for their own failings. Councils are not the reason why the economy is flatlining, but they might be part of the solution. The ultimate responsibility lies with the Government.

Damian Collins: In the short time available I wish to focus my remarks on business rates and tax increment financing. I will pick up on an issue that has been raised throughout the debate, particularly by Opposition Members, which is that the partial retention of business rates is unbelievably complicated and that it is somehow a centralising step; it is anything but that. The fundamental principle is incredibly simple: it is about creating a mechanism whereby there is a greater degree of common cause between business growth in the business community and the decisions a local authority might take.
	I have heard no one in the debate support a totally localised system, with councils keeping every single penny of business rates. That would exacerbate the
	problems that Opposition Members have spoken about, which is why that is not what is set out in the Bill. A totally nationalised system would be totally centralised, taking business rates completely away from local authorities. What is proposed instead is a very simple and powerful idea: giving local authorities, in a fair way, the power to retain some of the business rates they collect, creating a much more physical link between them and the local business community. When we talk to constituents, we often find that they think that that happens anyway. Some are surprised to learn that business rates are simply passed up the chain, and that the link between the local business community and the local authority is not there to the extent that it used to be.
	That link will help councils to develop proactive strategies on regeneration beyond those they have at the moment, and to develop better relationships with their major employers, so that they can work together to see how they can foster business growth. Although these are difficult economic times, some businesses are looking to expand. I see them in my local authority, and the council is having discussions with them on what it can do. The business community wants a greater sense of urgency on the part of local authorities—even local authorities that have a good relationship with their businesses—in planning decisions and consultations, and in working together and saying, “What can we do to help you to grow your business?”
	I agree with the hon. Member for Lewisham East (Heidi Alexander) that it is difficult to see how growth can be stimulated in local authorities where there are pockets of deprivation and low business activity. Such problems have existed in Folkestone harbour and the east end of Folkestone since the departure of the channel ferry business and the closure of the traditional port. There, a private investor and philanthropist has invested to create a new business community based around the arts and creative industries. I wholeheartedly support that scheme, which has been driven by big private investment, but the challenge is to ask what the local authority can do alongside that to help drive the process forward, rather than simply taking planning decisions and having a friendly relationship. Can the local authority look to invest alongside that development, to create a new raison d’être for that local economy that will attract other businesses?
	In that respect, the tax increment financing powers are interesting and important, because they create a mechanism whereby local authorities can borrow to invest to improve business infrastructure to attract business. We know that in areas of market failure, market forces on their own are not enough to drive regeneration. There are fundamental reasons why the business base in that area has collapsed, and it needs special help and support. The tax increment financing powers in the Bill can deliver that, and the incentives for local authorities to grow their business rates. They will know that doing so gives them more money to spend on local resources. The powers will also give local authorities an argument to make to local people when they are considering planning applications for business expansion. They can say, “The community gets something back from the local authority’s proactive relationship with the local business community and from seeing business rates grow.”
	Tax increment finance powers enable local authorities to behave in the way that a major commercial landlord of a large estate would behave. In most parts of the
	country, town centres are not dominated by a single landlord, but we find that situation in the centre of London. Such a commercial landlord will invest heavily in improving the quality of the business stock and business infrastructure, in the knowledge that they will gain when the higher rents come in.
	Some landlords that operate in central London, such as the Grosvenor estate, which operates a mixed commercial and residential portfolio, invest in commercial areas and give discounted rates to make the community a nicer place to live, knowing that they can recoup the discount through the residential income they get from rent on their properties. They take a view on investing in their estate and getting the money back. In areas of the country where no single dominant landlord can do that, taking such a view is a role for local authorities. With the new relationship with the business rates and the powers of tax increment financing, we give local authorities a way to develop a local plan for regeneration that will be better and more targeted than any Government Department could ever devise for that community.

Bill Esterson: I shall speak about the business rates proposals, the many gaps in the Bill and the unanswered questions. The councils that have faced the biggest cuts will lose most from the proposed changes to business rates. The impact of the local government cuts on businesses will take many years to work their way through, because there will be less money in the economy where the cuts in the public sector are greatest. In Sefton the cuts are already affecting businesses that rely for much of their trade on the public sector. The economy in Sefton, Liverpool and across the north-west will face greater pressures than the areas where the cuts have been far smaller.

Steve Rotheram: Would my hon. Friend be surprised to hear that when I asked the Secretary of State, in this very House on 18 July, whether he would
	“guarantee that Liverpool will not see a real-terms cut in its funding”
	in the first two years following the changes, he said:
	“Yes, it is going to do better out of this system”?—[Official Report, 18 July 2011; Vol. 531, c. 670.]

Bill Esterson: I am grateful to my hon. Friend, who is absolutely right. The Secretary of State made similar remarks in his speech today, and I will explain why he is completely wrong.
	The reality is that even if the starting point for business rate retention is after the main element of the cuts has gone through, some businesses will struggle to survive in areas where the cuts have been greatest. Councils in those areas will therefore experience falling business rates, with a further impact on the services that can be provided by the councils that have faced the biggest cuts. Areas such as Sefton and Liverpool have some of the most deprived communities in the country. The scale of the Government’s cuts has already hit those communities harder than the more prosperous parts of the country, and that includes the loss of services to some of the most vulnerable.

Andrew Stunell: Does the hon. Gentleman recognise that in the past five years Sefton has had an annual increase in its business rate of 6.1%, and Liverpool has had an annual increase of 8.2%?

Bill Esterson: I am glad the Minister made that comment, because it gives me the chance to make the point that that was before the massive cuts in Sefton, Liverpool and other metropolitan boroughs made it unlikely that such developments will continue. It is very likely that we will see a reduction in business growth as a result of the impact on the economy.

Andrew Stunell: It’s the same old record.

Bill Esterson: The Minister says it is the same old record—but it is the same old Tories doing the same old things to the most deprived communities.
	The Government’s proposals in the Bill are unfair and hit the poorest communities hardest. They also ignore the reality that, as my hon. Friend the Member for Lewisham East (Heidi Alexander) said, councils have a limited role in promoting growth. Only authorities that grow business rates above the level of the Government’s national assumption will benefit, while the others will lose, so the gap between the most prosperous and the less well-off will widen.
	The Secretary of State retains many of the powers relating to business rates. The centralising tendency is very much in evidence, and the more the Bill is scrutinised, the clearer it becomes that localism will be dished out in very small doses, at the bidding of the Secretary of State. The Treasury is to take a cut of any growth in business rates. That undermines the stated aim of incentivising local councils, and it risks limiting the likely take-up by the vast majority of councils—a point being made by many local authority leaders.
	I am aware of the many concerns about the plans for the local retention of business rates. Many questions still need to be answered. The Government plan to reward councils that exceed national growth expectations, so they will, by definition, artificially punish areas that have low growth, such as rural areas or areas where major industries have recently shut down.
	The measures will also penalise areas such as Sefton, where there is a shortage of available industrial land, and where there are limits on the potential for economic development. Sefton is in the process of putting together its core strategy, and it is struggling to find the development land needed to benefit from the Secretary of State’s proposals. I hope he will take on board the very real concerns not only of council leaders, but of businesses that face the problem of being unable to create growth because they do not have land available.
	Given the Government’s record in applying the current cuts unfairly, there is no confidence that they will not do the same with business rates localisation. Incentives for local councils to generate economic activity are one thing, but a system that undermines local authorities serving deprived communities and boosts those in least need is not the way forward. The Secretary of State should think again.

Eric Ollerenshaw: At this stage of the debate we always try not to double up on what others have said, but the hon. Member for Sefton Central (Bill Esterson) said it would be fine if the present local government finance scheme had actually dealt with the differences between authorities. Many Opposition Members have talked about perverse incentives and about a lot of history, but let me explain some history.
	I spent 17 years as a Conservative member of Hackney council, which the shadow Secretary of State referred to as one of Britain’s poorest boroughs. When I joined the council as a Conservative—as Members can imagine, there were not many Conservatives on Hackney council—it used to proclaim itself Britain’s poorest borough for a reason. There was almost a perverse incentive for it to do so. I am not saying that Labour councillors did not want to see the council and its tenants better off, but it was in their interests, given the funding regime, to exaggerate how badly off Hackney was. It meant that they could get more from the rate support grant.
	That perverse incentive has continued. I shall give another example from those days and my early learning experiences in local government in the 1980s. I used to sit on the housing committee, and once while discussing housing benefits I made what I thought was a stirring speech on behalf of Hackney’s tenants when the Labour party wanted to increase rents by 6.8%. I was complimented afterwards on the standard of my speech. Members might not believe it but I was a new young councillor then. But I was told, “Actually Eric, it doesn’t matter. They’re all on benefits so we can just put up the rents.”
	We are not saying—although I understand that the Opposition have tried to say it—that the change proposed by my right hon. Friend the Secretary of State is a massive revolution along the lines of the community charge, but, as other Government Members have said, it will mean that we can begin to provide councillors with a way of raising extra money by entering a bargaining system with business. The main thing that counts when encouraging business growth is a person’s ability to put their own money on the table. At the moment, though, there is little in the system to give councillors that ability. I believe that these reforms are the first step along that road.
	Members have mentioned the north-side divide. I represent a part of the north, and my district councils are looking forward to these reforms. For example, Lancaster council can now envisage finally being able to raise money off its own back, go into partnership with local businesses and perhaps open that third bridge.

Kevan Jones: Does the hon. Gentleman realise that his council will also have to take responsibility for council tax benefit, which will come with a 10% cut, so that although it could end up raising money locally it might have to use that to subsidise council tax benefits?

Eric Ollerenshaw: From what I hear from my councils, that is not the prospect that they are looking forward to. Lancaster council wants finally to build a third bridge, for which Lancaster has been waiting years. Wyre district council has been waiting years to open a railway line to Fleetwood, where a railway line currently exists, and by
	borrowing through some of these schemes it could open up new development plans to business. It is looking forward to being able to close the north-south divide.
	My support for the reforms is based on the need to achieve growth. Like many Government and Opposition Members, week after week I meet businesses in the north-west, particularly in my constituency, that have the potential to grow but just want a little extra support. That might mean doing up the road on the industrial estate or providing a bit of extra shedding so that they can meet their orders. With these changes, councils will finally have an interest in encouraging that business. [Interruption.] Opposition Members might scoff, but as was pointed out, in particular by my hon. Friends the Members for Ipswich (Ben Gummer) and for Milton Keynes South (Iain Stewart), the problem is that local councils, for good or ill, have divorced themselves—or have been divorced by the system—from any real interest in encouraging and supporting economic growth.
	The best councils have wanted to encourage growth. I take my hat off to those such as the hon. Member for Lewisham East (Heidi Alexander), whom I have met before in relation to this matter, for all the work that they have done to encourage that growth, but the fact is, as we all recognise, that some councils and council officers have seen little benefit in going out there to support and encourage business because it has not directly affected their income. These changes will at least start to address that situation.
	I shall finish on a point that I have raised elsewhere. I think—I might be wrong—that under paragraph 37 of schedule 1 the Secretary of State could allow new types of enterprise zones. Why are we not encouraging university campuses to have their own enterprise zones? I know that that would cause problems with Treasury mandarins and their calculations, but we seem to have missed a trick, because we are talking about something that could be the very basis for creating and developing new businesses, albeit not on such a large scale. Once those businesses got that extra bit of employment, they would have to move off by definition, because of the nature of university campuses. That would mean getting the turnover that we want and would deal with the criticism of the old enterprise zones—that businesses moved in from other areas and stayed there.

Kevan Jones: I am pleased to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), who is living in cloud cuckoo land if he thinks that this Bill will suddenly drop pennies from heaven on to his constituency and the north of England, to regenerate his and other areas. What we have before us today is an extension of this Government’s local government policy, which is about cutting local government finance, but giving the impression that the tough decisions that local councils are having to make are not the Government’s responsibility, but the responsibility of those very councils. Yesterday, for example, the council in Doncaster cut wages by 4%. The Government are saying, “Well, it’s your decision.” They are giving councils the baby and letting them decide how they slice it up.
	I take exception to what Government Members have said about how local government is somehow not interested in regeneration. I spent 10 years on Newcastle city council, serving my final years as chair of the economic
	development committee. It was a council that put a hell of a lot of effort into regenerating both inner-city Newcastle and surrounding areas. Likewise, Durham, my current county council, is making a tremendous effort, and has done for several years, to try to encourage business into County Durham, but it has been hamstrung. Some of the things that the Government have done recently, such as abolishing the RDAs, have made it virtually impossible for the council to spend nearly £140 million of European regional development fund money. It is sitting there, ready for development, but because of the constraints put on the council by this Government, no one can access the money.
	The point about the proposals on business rates is that, yes, local government can have an impact on regeneration; but it is a damn sight harder in County Durham, even with the tremendous efforts of local business and the county council to secure inward investment, than it is in Canary Wharf or other prosperous parts of south-east England. We are not dealing with a level playing field from day one; indeed, local councils are not even the only driver for getting inward investment. It is far easier for people to make investment decisions down here—we only have to look at the investment and the number of cranes going up in the east end of London now, in a recession, in hard times. We can only dream of that kind of investment in parts of the north-east. Every single inward investment decision that has been taken for the north-east has been hard fought for.
	The idea is that this small change will somehow make a real difference, but it will not. We will end up with a two-stage Britain, where this measure will be good news for local councils in the south-east of England—I accept that certain parts of the south-east of England are depressed and deprived—because, frankly, they will not have to work very hard to get inward investment and an increase in business rates, whereas that will not be the case in more deprived areas. Over time, we will clearly see a disparity, which will lead to a two-speed Britain, with things made even harder by this Government, who have abolished things such as the RDA in north-east England.

Steve Rotheram: Does my hon. Friend agree that all this is the continuation of a policy, which was tried out in the ’80s by Thatcher and Howe, of managing the decline of northern cities, especially areas such as Liverpool?

Kevan Jones: It is exactly. Let us look at what this Government and this Secretary of State have done on local government. I take my hat off to him, because he is rewarding his friends and his councils in the Tory heartlands. The idea is that we can somehow just write off great cities such as Liverpool and Newcastle, or other north-east cities, as if it does not matter. Do the Government actually care? No, I do not think they do.
	The Secretary of State said in response to my intervention that Durham would gain under the new proposal. I would like to see the figures showing how Durham will gain, because the county council has seen from its own figures—he is using 2011-12 as the baseline—that it will lose out. This is being rushed, and it will become clear, over time, that it is not the radical approach to local government reorganisation that some people suggest. It
	is in fact a way of ensuring that prosperous Conservative seats will benefit from the measures at the expense of some of the poorest communities in Britain.
	I want to turn now to the scandalous situation relating to the localisation of council tax benefit. This measure comes with a 10% reduction from day one, and it will disproportionately affect constituencies such as mine, and more deprived areas with larger numbers of people in receipt of that benefit. Listening to the Secretary of State talking earlier, it sounded as though he thought that those people were the feckless poor. I must remind him that a lot of low-paid workers, who are working blooming hard every day of the week to keep a roof over their heads, rely on council tax benefit. Over a period of time, those people will get the impression that these decisions are nothing to do with the Secretary of State, and that it is the local council that decides how to divide the money up. This measure will have a disproportionate effect on those areas with a large number of people in receipt of council tax relief.

Eric Pickles: I am sure that the hon. Gentleman suggested only inadvertently that I was talking about the feckless poor and the like. May I respectfully remind him that I was quoting the Leader of the Opposition and the shadow Secretary of State for Work and Pensions? It is with them that he should take up this matter, not me. Do not put words into my mouth; those were their words.

Kevan Jones: I was not putting words into the right hon. Gentleman’s mouth, but I have to say that he is continuing the mistaken idea that every person in receipt of council tax relief is unemployed and useless. They are not; they are hard-working, low-paid families—[ Interruption. ]

Lindsay Hoyle: Order. Those on the Government Front Bench need to come to order. I think that the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill) is getting carried away.

Kevan Jones: The proposals are going to affect many low-paid families in my constituency and elsewhere in the north in particular. The idea is to encourage people into work, but this will act as a disincentive to people, hard working though they might be.

Jim Shannon: Will the hon. Gentleman give way?

Kevan Jones: Unfortunately I cannot, as I have very little time left.
	Let us not be conned by the Secretary of State’s strategy. In the name of localism, he is pushing decisions down to local government, but cutting grants at the same time. He will then try to say to local people, “It’s nothing to do with me, guv. It’s your local council that is doing this.” That strategy was used by the Conservatives in Canada in the 1990s, and it is clear that this Government have learned from that play book and want to ensure that local people do not blame them but instead blame their local council, which will have been hamstrung by the grant cuts. It is about time that people saw through this bluster from the Secretary of State.

Jackie Doyle-Price: I would like to give an enthusiastic welcome to the provisions in the Bill, unlike the previous speaker, the hon. Member for North Durham (Mr Jones). It is surely right to expect local authorities to support and nurture the business interests of their localities. I believe strongly that the provisions of the Bill will act as a powerful incentive to local authorities to consider what they can do to facilitate business and economic growth. It is also clear that, if localism is to have any meaning, we must re-establish the link between local authorities and their local business communities.
	It is my view that the Bill will also make local government finance fairer, and I would like to illustrate that point with reference to my own local authority. The hon. Member for North Durham might be interested to note that my local authority is Labour-run, which might help to scotch the myth that it is only rich Tory boroughs that will benefit from the measures. Thurrock is a net contributor to the national pot, as we have a strong non-domestic rate base. At present, Thurrock collects some £98 million, but retains only £52.2 million.
	That is not to say that Thurrock is a rich locality, however. As a borough, it does not score highly on indices of affluence; indeed, we have a number of communities that score highly on indices of social deprivation. The ward of West Thurrock and South Stifford has some communities that are in the lowest 10%, for example, yet it generates some £64.2 million in non-domestic rate income, which is more than is retained by the whole borough of Thurrock. That ward is clearly making a significant net contribution to the Exchequer through all kinds of taxes. It is therefore fair and appropriate that some of those companies’ business rates should be retained for use in the local community, and I am pleased that the community will benefit from the growth in that area in the future.
	We should note, however, that there are consequences for a local area that enjoys a vibrant business community. In Thurrock, for example, high volumes of heavy goods vehicle traffic and road congestion cause a nuisance for residents. If we expect local authorities to take a more balanced approach to leading and managing the interests of the whole of their localities, they must have a stake in the economic success of that locality. Without it, there is simply no incentive to think beyond short-term electoral advantage.
	I am quite clear that the current system does not encourage local authorities to take a balanced view. It actively encourages local authorities to ignore the needs of the local business community. After all, they have no votes. At best, local authorities take local business for granted. At worst, they view it as an inconvenience. I have certainly received representations from the business community in my constituency to the effect that the local authority does not understand their needs and is unsympathetic to them. Businesses may not have votes, but their needs are important if we are to build strong and successful communities and a successful economy. This Bill will encourage local authorities to be more responsive to the business needs of their communities and, in so doing, they will promote growth and jobs—and who can argue with that?
	The Bill proposes that the Government should be able to retain some of the funding where local authorities
	benefit from disproportionate growth. I am quite interested to hear more detail about this. As I have said, Thurrock is already a substantial net contributor in respect of business rates. That contribution looks set to increase. We have massive inward investments by Dubai Ports; the port of Tilbury is expanding after an already successful 125 years; and, of course, the Lakeside shopping centre is building on its existing success. I am therefore interested in how the Government intend to operate the levy when a local authority receives a disproportionate increase in revenue, and in how to make sure that this is handled fairly. In particular, I remind Ministers that in supporting business growth, there are consequences for the locality. If we are to encourage local authorities to use tax increment financing and borrowing against their future returns, they need to be clear about just how much they will get from the expansion.
	In finalising the provisions for the levy, I hope that Ministers will bear in mind the strong principle that local authorities must receive a significant stake in return for encouraging additional investment. Ultimately, we need to make it easier for contributing authorities to contribute even more to the Exchequer through business growth and, as my right hon. Friend the Secretary of State said in his opening remarks, to make the pot of non-domestic rates even bigger.

Alex Cunningham: With about 186,000 people and two MPs, the Stockton borough is one of the smallest unitary authorities in the country. It is also one of the best—it was recently council of the year, and for several years in a row, it has been in the top six authorities for its management of resources.
	For all its small size and success in managing resources, some 500 council jobs have gone since the coalition Government came to power. Still more will doubtless go as the attack on local government and the services it provides continue with this Bill. The lost jobs are adding hugely to increasing unemployment in an area where the jobless rate is already much higher than at any time under the Thatcher and Major Governments when areas such as Teesside and the wider north-east England economy were left on their knees.
	Now we have a grand statement from the Government: “Transparency, economic growth, flexibility, making communities masters of their own economic destinies”—all this is promised by the Local Government Finance Bill. These are fancy words that we know, and the Government must know, are an attempt simply to be upbeat in the face of a dire and failing economic policy that is in danger of driving our country back into recession. The jobs lost in my borough are reflected many times over across the country, and the charging white horse of the reform of business rates will not matter a jot—well, not for the worst hit areas in the economy. The reverse will be the case.
	What Government Members fail to acknowledge is that local authorities cannot all be equally alluring to business—however hard they try. Business taxation revenue varies hugely from place to place. In 2010-11, Westminster collected 33 times more than my neighbouring borough of Middlesbrough. The changes will widen the gap between authorities capable of promoting growth—mainly in the south—and those where growth is slow or non-existent.
	Far from there being, to quote the exact words of the Secretary of State,
	“no motivation for councils to support local firms or create new jobs”,
	local authorities have embarked on economic development in their area for countless years on the basis that this will attract jobs and so benefit their area. It is the right thing for local authorities to do.
	I have been disgusted this evening by the denigration of local authorities, their members and their officers. That the Secretary of State could make such an insulting statement shows how little he understands, despite his long service in local government, the way in which it works. The idea that there could be some overnight entrepreneurial revolution is sheer fantasy.
	I am particularly shocked that Ministers should believe that the 10% cut in council tax benefit will somehow magically reduce the number of people who need it. In fact, it will be squeezed at precisely the point at which there is the most need for help among low-income households. Pensioners and vulnerable households may be protected from the cuts, but that means that the whole of the 10% saving that local authorities must make will fall on the unprotected group that consists mainly of the working poor.

Jim Shannon: Will not the 10% reduction also mean more poverty and homelessness? How will that affect the hon. Gentleman’s community?

Alex Cunningham: I have no doubt that communities such as mine, and perhaps the hon. Gentleman’s, will be affected. I believe that we will see more poverty as people try to cope with much lower incomes.
	In many instances, the gains that the Government suggest will be made by the working poor as a result of the £1,000 increase in the personal allowance for income tax will be wiped out by the reduction in council tax benefit. The theoretical 10% reduction will equate to a loss of £1.7 million for the Stockton authority area, £1.2 million of it in my constituency. Given the exclusion of pensioners from the change, those affected are likely to be hit by a 20% reduction, which will contribute to a further increase in poverty. The Government’s proposals merely transfer one of the national costs of rising unemployment to councils and local taxpayers, creating a serious risk that every resident will face further cuts in services that are already under threat.
	I do not often find myself sharing many opinions with Government Members, but I simply could not disagree with the Under-Secretary of State for Communities and Local Government, the hon. Member for Bromley and Chislehurst (Robert Neill), when he said:
	“Those in greatest need ultimately bear the burden of paying off the debt”.—[Official Report, 10 June 2010; Vol. 511, c. 450.]
	As it is, the Bill tees up the poorest to bear the greatest burden. It neuters local authorities other than those in the most affluent areas, preventing their development, and it will lead to further job losses throughout the country, with no consolation for the nation as a whole. I will oppose the Bill tonight.

Bob Blackman: I believe that the first three years of the coalition Government will be remembered for three things: constitutional reform, dealing with the economic mess bequeathed by the Labour party, and localism. The Localism Act 2011 gave local authorities, and also local people, power to determine what happens to them. However, we have a hideously fiendish system of local government finance to deal with the money that is spent on supplying services, and I am delighted that we are finally dealing with that.
	I am not a stranger to the proposal that business rates should be retained by local authorities. I advanced it at the 1994 Conservative party conference in Bournemouth. Sadly I could not persuade the Conservative Government of the day to implement it, but I am delighted that we are taking the first steps towards ensuring that business rates raised locally are retained locally, because that is an ideal way of providing incentives for local decision-making.
	Of course, retaining business rates at local level will require a complicated system, from which there will be gainers and losers. Let me give two examples relating to a local authority of which I was a member for some 24 years. When Wembley stadium was demolished and taken out of the business rate pool, £1 million a year was effectively taken out of the income from business rates. That could have a disproportionate effect. Had the new system been operating at the time, the local authority would have lost the money for five years—some £5 million of income. Therefore, if an employer goes out of business there must be some means of compensating the local authority to address any fall in income. The provision encouraging local authorities to promote business in their communities is important.
	There has also been an issue in the suburbs. The last Labour Government encouraged—almost promoted—businesses closing down and sites being turned over to housing. As a result, in the suburbs business rate income has dropped, and it continues to fall. We must take account of that as we encourage local authorities to promote business in their areas.
	Local authorities have almost done away with promoting economic development as a main means of operating. The Bill will transform that. Local authorities will need to become business-friendly and promote business and jobs in their local areas. That is clearly the right way to proceed.
	Local authority finance has changed greatly. Housing benefit comprises almost one third of the money going through most local authorities’ books. Rightly, that will be taken away. The administrative costs of housing benefit were outrageous. However, I have concerns about the implementation of the council tax benefit in such a brief time scale and the local impact of that. Almost everyone who is in receipt of housing benefit receives council tax benefit as well. Now that housing benefit will be administered through the Department for Work and Pensions, it makes sense for council tax benefit to be similarly administered. The situation currently proposed is bizarre, to put it mildly.
	Turning to tax increment financing schemes, many local authorities have huge historical debts, which were incurred as a result of the development of housing 30 or 40 years ago. Are we going to allow local authorities
	with such huge historical debts to borrow against future business rate income, and thereby incur yet further debt, in order to build more housing or undertake other projects within their local authority control? That would add hugely to their debt and to the amount of interest they are going to have to pay, and it will have a disproportionate effect on their total budgets. We must look at this, and make sure things are administered fairly and properly.
	This Bill is a welcome step, but the devil is in the detail and I look forward to debating that as we take it through its various stages to becoming an Act.

Sheila Gilmore: I want to talk about council tax benefit. The hon. Member for Harrow East (Bob Blackman) is one of the few Government Members to have raised concerns. Another Government Member who raised concerns served with me on the Welfare Reform Bill Committee, where we discussed this issue extensively. He, too, expressed considerable doubts about the council tax benefit proposal, especially as another Government Department, the DWP, has a project for universalising benefits under one umbrella—which might not be as easy as it thinks. Why keep council tax out of that?
	That is a very good question. One of the main reasons that the Government give for making such a huge change in welfare law in this country is to incentivise work and to make sure there are not the kind of perverse incentives that they think arise as a result of things such as different tapers on different benefits. There are, indeed, different tapers at present for tax benefits and housing benefit, but if we create a situation whereby everything apart from council tax goes into universal credit, we will immediately recreate an anomaly. That will have a work disincentive unless it is very carefully worked out. We must question why two major Departments do not seem to be talking to each other about that.
	The 10% reduction is a substantial reduction in the money available to local authorities to provide assistance to people on low incomes who need help. It should not simply be seen as something quite minor. I thought, particularly having worked on the Welfare Reform Bill, that this was primarily about saving money, but having read a lot of the comments in the consultation about this Bill, I realise that it is part and parcel of the Government’s view of local authorities: that they are not trying hard enough to get people into work. The Housing Minister said to the Select Committee on Communities and Local Government that the 10% reduction would encourage local authorities to make sure that business parks got off the ground and that people got into jobs—because of course, if people had jobs they would not then need council tax benefit. Actually, that is not true.

Andrew Gwynne: My hon. Friend is making a really interesting point about the perverse incentives that the Bill will introduce. Does she accept that in fact, it will really clobber hard-working families who are struggling to make ends meet on low-paid work, and who rely on council tax relief to ensure that they can afford to work? In areas such as mine, it is those low-paid jobs that people will give up.

Sheila Gilmore: It is people in work who will suffer in particular. Of course, this localising Government are not prepared to leave even their own local authorities to decide how the new council tax benefit should be distributed, because they want to insist that pensioners be protected. That is all very worthy, but protecting pensioners creates a greater burden on other people. There has even been the somewhat vague suggestion that some other vulnerable groups will be protected. The definition is not quite clear, but if other people are to be protected—which may not be a bad thing—the burden on those who are in low-paid work will be increased even further.
	This is the direct opposite of what the Government say they want to do in incentivising work, and I do not believe that making such a change will alter the way local authorities work. In fact, I do not think we need to do that. This Government are very good at tilting at windmills, and the windmills are creations in their own head. We have heard about one from various speakers today, and it runs like a thread through the consultation: the suggestion that local government is not interested in creating jobs or encouraging development and industry. I do not recognise that feature of local government. Indeed, during my 16 years as a councillor, we were more often accused of favouring business over local people at various times. We created a large office park development in the city, which would not have happened had the local authority not put together the land assembly and the infrastructure and encouraged that to happen. That happened without having our local business rates in our own hands.
	I simply do not recognise this false stereotype. It shows that a Government who say they believe in localism actually have a very poor attitude to local government and those who serve it. This Bill will be unhelpful in a lot of ways, not least because it will make the working relationship between Government and local government worse, not better. There is no respect in it for the very hard work that local authorities are putting in. We should not be perpetuating such a factless myth when we are trying to encourage localism.
	It is not too late. One Government Member suggested that it is somehow too late to deal with the council tax benefit, but even the Welfare Reform Bill has not yet passed into law. It is not too late for the Secretary of State and his colleague in the DWP to get together and find a better system.

James Morris: Britain has one of the most centralised systems of local government finance in the developed world, which is why I support this Bill in beginning the process of removing that centrally controlled straitjacket. It is also why I welcome the provisions for the relocalisation of the business rate as a significant step forward in achieving the devolution of financial power. I have been a strong advocate for relocalisation for a long time, in my capacity as chief executive of Localis, the local government think tank, because I believe that relocalisation of the business rate will provide a significant incentive for local authorities to drive business growth. It will also, as the Secretary of State said, significantly change the culture, so that local government will no longer be looking upwards to the centre for grant funding but will be looking for locally driven solutions to issues of economic development.
	I recognise, as others have done, the important contribution that tax increment finance can also play in providing a new and innovative mechanism of funding for local authorities, and I very much welcome the Bill’s provisions on TIFs. Dudley metropolitan borough council, one of the local authorities in my constituency, is already looking at projects that it might be able to convert into TIF-funded infrastructure development, which is critical. I welcome both those central provisions.
	I also particularly welcome the opportunity for enterprise zones to retain a proportion of the uplift in business growth and in business rates, because that is going to be a good way of incentivising and developing local enterprise partnerships and offering them a long-term income stream. I very much welcome the Bill as a significant step forward and major milestone in the Government’s approach to localism. It is a very important first step in moving towards a genuine devolution of financial power, so I very much support the provisions and welcome the Bill strongly.

Mark Pawsey: I thank my hon. Friend the Member for Halesowen and Rowley Regis (James Morris), a fellow member of the Select Committee on Communities and Local Government, for keeping his remarks so brief in order to enable me to make one or two comments of my own.
	Allowing local authorities to retain part of the business rate is a key part of the Bill and I wish to speak from the perspective of a business owner, which is what I was for 25 years before arriving in this place. Business rates were a significant cost to my business, as they are to every other business, being the third largest tax we paid. They cost several thousand pounds a year, and they increased as my business grew and moved to larger premises. As a business man, it came as a bit of a shock to me, before getting involved in politics, to realise that the business rate bill that I paid to my local authority was not spent by my local authority in pursuit of services in the area in which I was based, but went into a central pool. It is entirely right that a proportion will in future be retained by the local authority, because promoting growth is a key role for local authorities. It is also very important to business owners, because that growth develops new customers and new clients for businesses and provides a better situation for staff.
	I wish to discuss one issue not covered by the Bill, which is vacant commercial rates. There was an opportunity to extend relief to businesses that own vacant premises. The rating of those premises is causing hardship to the business community and it is making it difficult to encourage business growth, because there is currently no speculative building of business units and it has encouraged the demolition of vacant older industrial buildings so that the tax can be avoided. I wish to distinguish that approach from the provision on empty homes, because the housing market is distinctively different from the commercial property market. I welcome the empty homes premium, because we have 700,000 vacant homes and it is important that we provide an incentive to bring them into use.
	I wish to discuss a final point about the influence of planning permissions. We await the outcome of the national planning policy framework, but there is a risk
	that the retention of business rates could become an additional incentive to grant planning permissions for developments that are not necessarily in the most appropriate locations. I hope that that concern will be addressed by a robust commitment to town centres first in the final draft of the NPPF, as the Select Committee report suggested.
	I welcome the Bill. It is consistent with the Government’s decentralisation and localism provisions, it is a step change away from the dependency culture we have had up until now, and it pursues a strong localism agenda that will prioritise economic growth, which I will always support.

Helen Jones: This has been an interesting debate, marked by a number of contributions from people with real expertise in local government finance and real concern—from those on the Opposition Benches—about what the Bill means for their communities. I do not have time to do justice to them all, but my right hon. Friends the Members for Wentworth and Dearne (John Healey) and for Greenwich and Woolwich (Mr Raynsford), both distinguished former Ministers, made some serious points, as did my hon. Friend the Member for Sheffield South East (Mr Betts), the Chair of the Communities and Local Government Committee, supported by my hon. Friends the Members for Stalybridge and Hyde (Jonathan Reynolds), for Plymouth, Moor View (Alison Seabeck), for Stoke-on-Trent Central (Tristram Hunt), for Lewisham East (Heidi Alexander), for Sefton Central (Bill Esterson), for North Durham (Mr Jones), and for Stockton North (Alex Cunningham). They were all united in their deep suspicion of the Government’s motives and they are right to be, because as usual the Government began with grandiose declarations about what they intended to do, but that ended in failure.
	There has been a failure to look properly at local government finance as a whole, a failure to consider need and a real failure to accept the Government’s own role in promoting economic development. We have ended up with a deeply flawed Bill in which we are asked to write a blank cheque for the Secretary of State. He will decide the tariffs and top-ups, he will decide the amount of the levy and he will decide who gets a safety net payment. He is rapidly becoming the Del Boy of local government finance, selling us all dodgy schemes while he sits there, rubbing his hands and saying, “You know it makes sense.” We are not buying, and we are not buying because we know his record. We saw how in the so-called Localism Act 2011 he gave himself 100 more powers. We have seen him design a local government finance settlement to centralise power and devolve the blame. That is exactly what the Government are up to now, and it was clear from the moment of their consultation, when they said that
	“local authorities can be reluctant to allow commercial development and promote economic growth”.
	I ask the Government, as I have asked them before, to name one such local authority. I know of no local authority—certainly no Labour local authority—that is not desperate to attract jobs and growth. It is not local councils that have stalled the economy, but this Government, who inherited an economy that was growing faster than the EU average and faster than that of the United States, and who destroyed it with a slash-and-burn
	approach to public spending. Of course, the Secretary of State is a true believer in that. He began in 2010 with in-year cuts to specific grants, which by their very nature target the most deprived communities. He then designed a local Government finance settlement that we are asked to accept as the baseline for business rate redistribution and that is breathtaking in its unfairness.
	One need only look at the heat maps to see where the cuts fall: the north-east, Yorkshire, the north-west, parts of inner London and parts of the midlands. As a result of the Secretary of State’s settlement, by 2012-13 Liverpool will have lost spending power of £235 per person, Hartlepool £183, Newcastle £144 and Wokingham—the Government’s favourite council—just £1. That is what we are asked to accept as the baseline—a baseline, moreover, that includes the new homes bonus and the 2011-12 council tax freeze grant. That all gives advantages to authorities with a high tax base over those with a low tax base. The system starts from inequality and it will go on to entrench it further.
	There is nothing in the Bill about the infrastructure that many areas need to allow them to develop and there is nothing about the surplus capacity in many of our cities. Liverpool has empty office space that is already subject to rates, which could create 15,000 jobs if brought back into use, but hardly any extra income for the local authority. An area such as Halton has 22.3% of its business property with an empty rating assessment. Again, that could create more jobs but hardly any extra income for the local authority.
	The big black hole in the Government’s Bill is any recognition of their own responsibility to promote growth and help weaker economies to grow. It is not surprising then that they have even failed to address where business rates are a proper measure of economic growth at all. Commercial and retail premises generate far more business rate than manufacturing and small businesses. Small business start-ups, internet businesses and sectors such as tourism are vital to our economy but generate little in business rate. Nationally, we need those businesses. We need the skills they bring, the innovation they develop and the exports they gain. It is typical of the Government’s muddled thinking that they claim to support manufacturing and small businesses but then design a scheme with a built-in incentive for retail. No wonder the Secretary of State has been told by the leaders of local authorities in manufacturing areas that the Bill gives preference to retail over manufacturing.
	The Bill also gives preference to the rich over the poor. Under the scheme, the gap between rich and poor areas and between north and south will widen—even if top-ups and tariffs grow by the retail prices index. It will widen even if all local authorities generate the same increase in business rates and council tax, because another thing that the Government have failed to consider is the different tax base of local authorities, particularly the different council tax base, which is not in the Bill at all. They have nothing to say about areas such as the north-east, where 56% of properties are in band A and 86% are in bands A to C. They have nothing to say about the difference between those areas and Surrey, for example, where 75% of properties are in band D or above. They have nothing to say about it because they do not want to address the problem of inequality.
	The same is also true of the Government’s suggestion about the localisation of council tax benefit, which we will need to discuss in much more detail in Committee.
	The scheme will ensure that the people who are hit hardest will be the working poor—the people who go out every week to earn their poverty—and this from the Government who say they want to make work pay.
	Another big thing that is missing from the Bill is any assessment of need. This Government with a Cabinet stuffed full of millionaires do not care about those who need local services. I know the Secretary of State is going to tell me that he is not a millionaire, but he hardly represents the squeezed middle, does he? The Government have nothing to say about areas such as Liverpool, which has seen a 73% increase in special guardianship orders since 2009, or Durham, where nearly 2.5 times as many people require home care as in Surrey. They have nothing to say about areas such as Halton, where 24% of the population have a limiting long-term illness. In future, those services cannot be safeguarded if business rates fall because the Bill introduces a postcode lottery in services and benefits. No longer will a person’s entitlement depend on their situation; it will depend on where they live.
	It is for that reason that we oppose the Bill. It will increase the disparity between rich and poor; it will hit the poorest areas most; and it will in the end ensure, as my hon. Friend the Member for North Durham said, a two-tier, two-speed economy in Britain. For that reason, I urge my hon. Friends to oppose the Bill in the Lobby tonight.

Bob Neill: Some 26 Members have spoken in the debate, and I too apologise if I cannot follow every one of the interventions in detail. I appreciated the contributions of my hon. Friends the Members for Crawley (Henry Smith), for Mid Dorset and North Poole (Annette Brooke), for North West Leicestershire (Andrew Bridgen), for Ipswich (Ben Gummer), for Meon Valley (George Hollingbery), for Milton Keynes South (Iain Stewart), for Nuneaton (Mr Jones), for Folkestone and Hythe (Damian Collins), for Lancaster and Fleetwood (Eric Ollerenshaw), for Thurrock (Jackie Doyle-Price), for Harrow East (Bob Blackman), for Halesowen and Rowley Regis (James Morris) and for Rugby (Mark Pawsey), all of whom spoke from experience in local government and also, significantly and importantly, often from experience in business too, because one of the Bill’s objectives is to re-establish a proper link between local councils and the businesses that they serve and the communities who benefit from growth.
	It has been in other respects, I confess, a classic curate’s egg of a debate, with some thoughtful and considered speeches and some of quite breathtaking banality. When I listened, with every respect, to the hon. Member for Warrington North (Helen Jones) talking about a golden legacy left by the previous Government, I realised we had finally entered the realms of illusion. While I bring the hon. Lady back to reality—and talking of experience—let me just tell her that this grandson of a London docker is not going to take any lectures on need from the party of Tony Blair.
	The reality is that the Bill is a necessary measure to clear up the mess that the Labour party made of Government finance in 13 years. Two of the Ministers responsible have done their very best to defend a local
	government finance system which they regard as so wonderful that it should almost be a listed building, but which has been described by dispassionate observers as incomprehensible, complex, unfair and unable to provide a proper means of distribution.
	It was interesting to hear references to the Lyons review, which the Labour Government sat on for three years, doing nothing. Lyons said:
	“there are no coherent or systematic financial incentives that encourage growth either for”
	councils
	“or, more importantly for their communities.”
	Labour did nothing; we are doing something.
	“The current English model of equalisation is recognised as one of the most complex in the world”
	said the Lyons review, which Labour set up and ignored when it did not give them the answers they wanted. We are doing something about it.
	The university of Plymouth—the hon. Member for Plymouth, Moor View (Alison Seabeck) spoke earlier—said:
	“the four-block model is deeply flawed and generates an inequitable allocation of this major source of local authority revenue.”
	The Labour Govt did nothing about that, although they had the information; we are putting it right.
	Secondly, it is shameful—

Dave Watts: Will the Minister give way?

Bob Neill: There has been little time, and I intend to make a few points, if I may.
	Secondly, and particularly regrettably, there was the simplistic analysis and the misleading attempt in the debate to create a false north-south divide—particularly disgraceful, it might be thought, when one has only to look at the facts and observe that over the last five-year revaluation period, when the average business rate growth in England was 5%, the following authorities had business rate growth above the average, and therefore would have benefited more than average had our proposed system been in place: Doncaster, Durham, Greenwich, Hull, Liverpool, Manchester, North Tyneside, South Tyneside, Sunderland, Sefton, Stockton, Middlesbrough—[Interruption.] No, I am not prepared to take any lectures from Labour Members when they cannot get the facts right. I will give way once, briefly.

Helen Jones: Would the hon. Gentleman like to tell us how much was invested in those regions by the Labour Government to promote that growth—investment which has now been cut under his Government?

Bob Neill: That confirms my view that there is an illusion that the racking up of debt is somehow beneficial to this economy, and that is the reason why, I am afraid, in one aspect of the Bill, it is necessary for us to deal with the required deficit reduction in relation to council tax benefit—precisely because the only way in which we will get sustainable long-term growth in any parts of this country is by reducing the deficit that we inherited.
	In tackling that important issue, the Bill seeks to meet the concerns of local government that the reform of the benefits system into universal benefit might have
	meant that there was no longer direct payment of those moneys to local authorities. Our Bill makes that point, but also gives local authorities the ability to design those savings in a way that reflects their needs and their priorities—which, as we all heard from the debate, vary from locality to locality. The unwillingness of Opposition Members to face that simple reality speaks volumes about the shoddiness of their analysis.
	It is remarkable that, with one or two honourable exceptions, no attempt was made to pursue some of the important measures which have been put in place to safeguard the underpinning of the business rate retention system. Not only will there be a baseline to ensure that no local authority loses out at the start, but the system of tariffs and top-ups will be uprated according to the retail prices index so that the vast bulk of local authorities’ income will be protected, and at the same time, local authorities that are incentivised to encourage growth will always see some benefit coming through. Similarly, the hon. Lady referred to infrastructure, but she poured scorn upon the introduction of tax increment financing, which is exactly the means of unlocking some of that infrastructure—a model called for by all dispassionate observers, and for many years by Members of all parties, and but consistently ignored by the Opposition. They seem to be stuck in—

Helen Jones: rose—

Bob Neill: I have given way once and I shall not give way again. I am sure the hon. Lady will have plenty of opportunity to raise these matters when we debate the Bill in Committee on the Floor of the House. I find it amazing that the shadow Secretary of State complained about that. It says it all that the first comment that the shadow Secretary of State could make was a debating point that it was objectionable that we should take such business on the Floor of the House, where every Member can participate, since every one of their local authorities is affected by the proposal. That suggests that the Opposition had very few other arguments to deploy. It is a little like the consistent trotting out of the inaccuracy in the growth figures across the UK. When we are reduced to a sort of political re-run of “Z Cars”, we know we have won the argument because the Opposition have nothing else to put into the equation.
	The reality is that for the first time the Government have taken steps to redress the balance in a system that is recognised across the world as not working. There is not an adequate linkage with local authorities. I believe there are local authorities of all parties that want to do the best by their community, but they lack the tools and the mechanisms to create that by encouraging growth in their areas. We are replacing a flawed system with one which gives them the scope for growth. I had hoped that Members in all parts of the House would applaud that. However, we get a degree of churlishness and carping, indicating that because the Opposition did not come up with the plan, they regard it as unworkable.
	We will talk through the details of the Bill as we examine it in Committee, but it is worth noting that very many of the independent responses to the consultation favoured this reform. It is worth bearing in mind the fact that in 2008-09 the Communities and Local Government Committee said that relocalisation would give local government an additional tool to purse local recession-proofing policies, and it is worth recognising
	that the new local government network, not normally associated with the coalition side of the House, said that it recognised the potential that the growth incentive presents to create new private sector jobs and prosperity.
	Hon. Members ought to wake up to reality and recognise that what is being put forward is an important and valuable reform. I hoped that rather than voting against it, they would have endorsed it and worked with us to make sure that we have a lasting system of finance for the future.

Question put, That the Bill be now read a Second time.
	The House divided:
	Ayes 332, Noes 232.

Question accordingly agreed to.
	Bill read a Second time.

Local government finance Bill (programme)

Motion made, and Question put forthwith, (Standing Order No. 83A(7) ) ,
	That the following provisions shall apply to the Local Government Finance Bill:
	Committal
	1. The Bill shall be committed to a Committee of the whole House.
	Proceedings in Committee
	2. Proceedings in Committee of the whole House shall be completed in three days.
	3. The proceedings shall be taken in the order shown in the first column of the following Table.
	4. The proceedings shall (so far as not previously concluded) be brought to a conclusion at the time specified in the second column of the Table.
	
		
			 Table 
			 Proceedings Time for conclusion of proceedings 
			 Clause 1, Schedule 1, Clause 2, Schedule 2, Clauses 3 to 5, Schedule 3, Clauses 6and 7, new Clauses relating to nondomestic rates, new Schedules relating to non-domestic rates. The moment of interruption on the second day. 
			 Clause 8, Schedule 4, Clauses 9 to 16, new Clauses relating to council tax, new Schedules relating to council tax, remaining new Clauses, remaining new Schedules, remaining proceedings in Committee. The moment of interruption on the third day. 
		
	
	Consideration and Third Reading
	5. Any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.
	6. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on the day on which those proceedings are commenced.
	Programming committees
	7. Standing Order No. 83B (Programming committees) shall not apply to the proceedings on the Bill in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.
	Other proceedings
	8. Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Jeremy Wright.)
	The House divided:
	Ayes 321, Noes 234.

Question accordingly agreed to.

LOCAL GOVERNMENT FINANCE BILL (MONEY)

Queen’s recommendation signified.
	Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
	That, for the purposes of any Act resulting from the Local Government Finance Bill, it is expedient to authorise the payment out of money provided by Parliament of—
	(a) any expenditure incurred by the Secretary of State in consequence of the Act, and
	(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided.—(Jeremy Wright.)
	The House divided:
	Ayes 314, Noes 189.

Question accordingly agreed to.

Local Government Finance Bill (Ways and Means)

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
	That, for the purposes of any Act resulting from the Local Government Finance Bill, it is expedient to authorise—
	(1) the payment of sums to the Secretary of State in respect of non-domestic rating, and
	(2) the payment of those sums into the Consolidated Fund.—(Jeremy Wright.)
	The House divided:
	Ayes 312, Noes 175.

Question accordingly agreed to.

Local Government Finance Bill (Carry-over)

Motion made, and Question put forthwith (Standing Order No. 80A(1)( a )),
	That if, at the conclusion of this Session of Parliament, proceedings on the Local Government Finance Bill have not been completed, they shall be resumed in the next Session.—(Jeremy Wright.)
	The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 11 January (Standing Order No. 41A).

Business without Debate

Business of the House

Ordered,
	That at the sitting on Wednesday 11 January paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motions in the name of Edward Miliband as if the day were an Opposition Day.—(Jeremy Wright.)

Delegated Legislation (Committees)

Ordered ,
	That the Policing Protocol Order 2011 (S.I., 2011, No. 2744), dated 15 November 2011, be referred to a Delegated Legislation Committee.—(Jeremy Wright.)

Mr Speaker: Before the right hon. Member for Blackburn (Mr Straw) opens his Adjournment debate, may I appeal to Members who are, unaccountably, leaving the Chamber to do so quickly and quietly, so that the rest of us can hear what he has to say?

RAIL SERVICES (CLITHEROE, BLACKBURN AND MANCHESTER)

Motion made, and Question proposed, That this House do now adjourn.—(Jeremy Wright.)

Jack Straw: Thank you very much for that, Mr Speaker, and for the opportunity you have given me to raise this important local issue of rail services between Clitheroe, Blackburn and Manchester in my first Adjournment debate at least in this century and going back a good part of the previous one.
	With the Transport Secretary’s key announcement earlier this afternoon of the Government’s commitment to press ahead with the High Speed 2 line, today will go down as a day of great significance in the development of public transport in the United Kingdom. Of course I welcome that announcement, as I welcomed the earlier announcements to extend electrification to the Manchester-Liverpool and Manchester-Preston rail corridors. HS2 will not, however, be completed until at least 2026, and the north-west electrification schemes will not be completed until at least 2016. So this evening I want to make the case for the pressing and much more immediate improvements needed in the north-south rail services from Clitheroe, which run through Blackburn and Darwen, and into Manchester. I also want to seek the advice and guidance of the Minister on how we can break out of an apparent Catch-22 that is in the way of those improvements, whose benefits for existing and future rail passengers, and for the wider economy of east Lancashire and the north-west, will, we believe, be significant.
	The campaign for improvement in the services is supported by all the Members of Parliament for the area, all the political parties and all the local authorities affected. My constituency neighbour, the hon. Member for Rossendale and Darwen (Jake Berry), is in his place and will speak immediately after me, and the hon. Member for Ribble Valley (Mr Evans) would be vocal in his support for this cause but for the fact that, as a Deputy Speaker, he can take no part in debates.
	Let me set the scene. Rail services in our area run east-west and north-south, with the main interchange being at Blackburn. When I became its Member of Parliament in 1979, these services in east Lancashire were, like those elsewhere, in the shadow of Dr Beeching’s axe, and they were in a process of what appeared to be terminal decline. Some lines had been closed altogether or had had their passenger services ended. On other lines, double tracking had been replaced by single tracks, and service frequencies had been greatly reduced—that is the fundamental problem on the line under consideration.
	In the 33 years since I became an MP, there have been some significant improvements in rail services. In the early 1980s, the Copy Pit line to west Yorkshire was reopened for passenger services. There is now an hourly fast service across the Pennines that, combined with a local stopping service to Colne, gives a half hourly east-west service throughout the day. In 1994, following a great campaign by rail groups in the Ribble Valley, with the support of the MP for that constituency and the county council and district councils, passenger services and stations from Clitheroe to Blackburn were reinstated. The new service has proved immensely popular.
	Significant sums have been spent on station improvements. In 2000, Railtrack replaced the old and decaying train shed at Blackburn station with well-designed new station facilities, which were part of a £5 million regeneration project. That set of improvements has been augmented in the past few months by new buildings on platform 4 at Blackburn station, which were made necessary by the increased demand for rail services on both the east-west and north-south lines. Much needed improvements at Darwen station will be completed in April and regional growth fund moneys for the Todmorden curve, enabling direct services from Burnley to Manchester, have just been agreed.
	Office of Rail Regulation data show that there has been a 90% increase in rail travel within the north-west in the 12 years from 1995-96 to 2007-08, exceeding by 20 percentage points the overall growth in all rail passenger journeys in Great Britain over the same period. The data also show that east Lancashire has been part of that extraordinary growth in local rail services in the north-west. There has been a 27% increase to 1.2 million in the number of passengers going through Blackburn station a year in the five years from 2004-05 to 2009-10 and an astonishing 46% increase in the number of passengers going through Darwen railway station, which is now 250,000 a year.
	Overall, the north-south Clitheroe to Manchester line is forecast to be used by 1.7 million passengers this financial year, the highest patronage ever enjoyed by the route. The service developments that are already taking place at Manchester Victoria will put more stress on the service as connections become even easier to a larger range of destinations, including Manchester airport.
	The irony is that alongside that catalogue of significant improvements, the one service that cannot be significantly improved at the moment is the line under consideration. The reason is very simple: the track between Blackburn and Bolton was singled in the 1960s. The result is that the maximum level of service that is possible to run on that line is that run today—basically, an hourly service with a half hourly service in the morning and evening peaks. Even maintaining that pattern of service is difficult as, because of the long sections of single track, delays become amplified, sometimes throughout the day. Overcrowding on the services can be intense, as all of us who use it can bear witness, and the quality of the rolling stock is poor on the whole—it is made up of the old Pacers and Sprinters of the 1970s and 1980s—despite the best efforts of Northern Rail, the train operating company. Essentially, other areas’ cast-offs are “cascaded” —I think that is the polite term—as new stock is brought in not in east Lancashire but elsewhere.
	The solution to that systemically unsatisfactory situation is obvious: to double track some, although not all, of the line between Blackburn and Bolton, to lengthen trains and to improve the quality of the rolling stock. A great deal of technical work has been undertaken already on the key issue of doubling the track. The north-west rail utilisation strategy for 2007 put the “anticipated cost” of the necessary infrastructure improvement at “over £20 million”.
	The consultants commissioned by the local authorities, Faber Maunsell, concluded in their 2007 report that a
	“positive business case is achievable for some of the options”
	under consideration. That said, the scheme has not so far scored highly enough on the standard cost-benefit analysis tools to feature in Network Rail’s confirmed
	investment programmes. The frustration that we all feel—the Catch 22—is that we know as a fact that there has been a huge increase in ridership even given the less than satisfactory frequency, reliability and comfort of the current service and we are convinced that pretty modest improvements in the scale of things would enable there to be dramatic improvements in reliability, frequency and ridership, with major benefits to the local economy. We see proposals elsewhere in the region and in the country whose intrinsic benefits appear to be no greater being more successful in the competition for funds, yet the formulae used do not appear satisfactorily to capture the economic and social benefits that we are sure will accrue from this investment. So, we look forward with optimism and anticipation to the advice from the Minister on how we can break away from the circular trap we are in and progress this scheme.

Jake Berry: Let me start by congratulating the right hon. Member for Blackburn (Mr Straw) on securing this very important Adjournment debate, which is vital to his constituency and mine. The railway link between Manchester, Darwen and Blackburn needs to be improved. As we have heard, the current service is infrequent and suffers from chronic overcrowding. Despite those problems, it is heavily used. Indeed, I was astounded to learn that there has been a 46% increase in the number of people catching the train from Darwen into Manchester in the past five years.
	This evening, the right hon. Gentleman and I ask the Minister for advice on how we can proceed as local MPs in partnership with our local authorities and on a cross-party basis to achieve the doubling of parts of the line between Darwen and Bolton so that we can have a regular half-hourly service that is reliable not only at rush hour but throughout the day. Other works will also be required to improve the service, including the lengthening of platforms to enable longer trains to ease the chronic overcrowding problems. In terms of public infrastructure, the improvements we seek are relatively affordable. Independent estimates have costed them at around £20 million.
	I do not want you to think that this is just the Jake and Jack line, Mr Speaker. Improvements would also benefit many other hon. Members of the House and would help residents in Salford, Bolton, Darwen, Blackburn and Clitheroe. My major concern is the Darwen dividend, as the local MP, and I want improvements in the line for my constituents. I draw the Minister’s attention to the overwhelming demand for an improved service, which has already been demonstrated by the increased use. Clearly, demand already exists.
	Why is the improvement we seek necessary? Even with the current overcrowded and often unreliable service, 10% of the borough’s work force from Blackburn and Darwen commute to Greater Manchester to work. As a Liverpudlian, it pains me greatly to admit that Manchester is the north-west’s superpower, but unfortunately I have to say that that is correct. Independent estimates suggest that about 60,000 new jobs will be created in Greater Manchester over the next 10 years. That jobs and growth dividend must be shared across Blackburn and Darwen, with my constituents, and across the entire borough. We want this growth dividend in east Lancashire, which has some deprived areas. We need it. Some of the growth in jobs and industry will be linked to MediaCity, and the
	line we are discussing is vital to servicing that development. It passes through Salford Central, which is the nearest station to MediaCity.
	Why would people in east Lancashire want to go to Manchester for jobs? It is simply about economics. People who work in Manchester are more highly paid than people who have a job within the borough. If we want those high salaries to be brought back into our borough by people bringing their money home at the end of the day to spend in our local economy, we need a regular rail service and a rail link that can be relied on. That, I hope, will be the Darwen dividend for growth.
	Finally, I urge the Minister to take a close look at the scheme. As I have said, it is affordable and the cost would be outweighed by the social, economic and leisure benefits for all the residents of east Lancashire. We are in a unique position in that our roads are among the most clogged up in the country. Indeed, the M66 was identified in the latest edition of The Sunday Times as the most congested road in Britain. We rely on our rail system and we need it to be improved. I hope the Minister will give that point some consideration.

Theresa Villiers: I start by congratulating the right hon. Member for Blackburn (Mr Straw) on securing this debate on, as he says, a very auspicious day for the rail network in the United Kingdom. While the focus for many today has been on the big project, which is going to be high-speed rail, it is also very important to continue to improve services on our existing rail network, including local services of the sort that we have been discussing this evening. I know how much importance the right hon. Gentleman places on that, as do the other hon. Members who are present today and want to make their arguments heard.
	The Government fully appreciate the economic benefits that improving our transport system can generate. That is why we have placed a priority on improving our rail network, even though our budgets are limited due to the need to deal with the deficit. So as well as going ahead with high-speed rail, we have embarked on the biggest programme of rail improvements to our existing network since the Victorian era, and that ambitious programme includes a number of very important projects in the north-west, which I may have time to cover briefly at the end if time allows.
	We recognise that capacity has been an issue for a considerable time on commuter train services into Manchester, including services from Clitheroe and Blackburn. The passenger growth figures that the right hon. Gentleman and my hon. Friend the Member for Rossendale and Darwen (Jake Berry) have referred to are indeed striking, and that pattern is reflected on many other parts of the rail network, which is why we have undertaken the programme of capacity expansion that we have. It was welcome news, therefore, when funding for the HLOS—high-level output specification—programme of additional carriages on the whole network was confirmed by the Chancellor in the comprehensive spending review. That programme included extra carriages for the Clitheroe-Blackburn-Manchester line. Since July 2010, three of the seven peak services on that route have been lengthened, providing a 20% increase in the number of seats, and platforms have been lengthened at four stations.
	I recognise, however, as do the Government, the local support for other proposals to improve rail services between east Lancashire and Manchester. We recognise the support for the half-hour all day service from Blackburn to Manchester, which many have expressed support for and which is under discussion tonight. That is why the Department for Transport has engaged at considerable length with Blackburn with Darwen council, Burnley borough council and Lancashire county council on finding a way to deliver the service improvements that those local authorities and the local communities want.
	I have been asked this evening to give advice on taking forward an improvement programme. The first stage has already been achieved—obtaining the support of the relevant local authorities. It is only when a commitment is made by the local authorities to prioritise these things locally that they have any chance of getting off the ground. It has become clear over recent years that rail service improvements between east Lancashire and Manchester have become a high priority locally, and the work that the councils have commissioned from Network Rail to carry out studies as part of their GRIP—governance for rail investment—process to identify infrastructure requirements is another important precondition for a credible proposal to enhance infrastructure and services. So again we are seeing this process being taken very seriously and important steps being taken, which are essential if there is to be a successful conclusion along the lines that the right hon. Member for Blackburn would like.
	The local authorities, I understand, have also been working with Northern Rail to carry out demand forecasting and to estimate operating costs. That kind of foresight and commitment from local authorities has meant that they have been able to take advantage of some of the funding opportunities that have emerged over the last couple of years in relation to east Lancashire services. The most striking example of that has already been mentioned this evening: subject to due diligence, Burnley borough council has secured the funding from the regional growth fund for the Todmorden curve to enable through trains to run between Accrington, Burnley and Manchester. That will provide a considerable boost for regeneration of the Weavers Triangle area, as well as important benefits for businesses and for commuters to access those important job opportunities in Manchester, about which my hon. Friend the Member for Rossendale and Darwen addressed the House. I congratulate the borough and county councils on their success. That demonstrates that such projects can get off the ground if the right work is done.
	The Clitheroe-Blackburn-Manchester line currently has an hourly service. We have heard this evening that there is concern locally that that is not frequent enough. It is supplemented by additional services at peak times between Blackburn and Manchester. I am aware that introducing at least a half-hourly service to Blackburn throughout the day is supported by Blackburn with Darwen council, Lancashire county council and Transport for Greater Manchester, as well as right hon. and hon. Members who have spoken this evening.
	As we have also heard, much of the route between Blackburn and Bolton is single track. That means that infrastructure improvements would need to be delivered
	if a reliable half-hourly service were to be introduced in both directions throughout the day. My hon. Friend mentioned the idea of doubling the line. Network Rail concluded that a longer passing loop at Darwen and an increase in line speed capability at Turton crossing were the appropriate improvements, and work is going on to establish how much they are likely to cost.
	Since this is a service generating primarily local benefits, it is for the local authority to identify a funding source for the investment needed to make it possible, but one possible source of funding would be the next major local transport schemes budget. This is the kind of project for which it is well worth putting forward a bid to that funding stream. Consistent with our wider localism agenda, we are currently considering how we might enlarge the participation of local and sub-national bodies in the decisions that are taken on how to allocate that major local transport fund, and we continue to engage with key stakeholders on our proposals. We will give further information shortly about the whole major local scheme that we envisage working in the future. We hope that there will be a bigger say for the local and regional stakeholders in the decisions.
	If the proposal to introduce half-hourly services on the line were awarded funding under this budget, I am advised that a scheme could conceivably be implemented by December 2016, which might tie in well with the north-west electrification programme and the Ordsall Chord, which we expect to have been completed by that date. Consistent with the approach taken by the previous Government, if additional off-peak services require an ongoing subsidy, that would need to be funded by the local authorities for at least the first three years of operation. It is not clear whether in the long term these services would require additional subsidy, but many such local services tend to require subsidy, certainly in the early years. If the additional services continued to demonstrate a good business case after a three-year period of local subsidy, the Government would consider funding them if funds are available. The local authorities will need to look at that to identify the funding to subsidise for three years any enhanced service that they seek to take forward.
	As a further relevant matter, I should mention that we plan soon to issue a consultation document on the decentralisation of decision making in relation to our railways generally. This could provide an opportunity for local authorities and PTEs to have a greater say in policy and decisions on local rail services, such as the Clitheroe-Blackburn-Manchester service. Decisions on this obviously await the consultation and its outcome, but services such as the ones that we have been discussing might be appropriate for devolution to a local body, playing a bigger role in relation to important aspects of the rail service and how the subsidy of those services is allocated within a particular area. But even without further devolution, a process is in place that could enable local authorities to take a scheme forward to enhance the Clitheroe to Manchester service. It does mean that they may have to make choices about whether the scheme is a higher priority than other transport choices in their area, but I can assure the right hon. Gentleman and my hon. Friend that we will continue to provide help and advice to the local authorities as they work with the rail industry further to develop the scheme and identify the funding needed if it is to go forward.
	I want to put this debate in the context of the Government’s wider improvements to rail in the north-west. In 2010, as the right hon. Gentleman mentioned, we confirmed the electrification of the so-called north-west triangle of routes, namely Manchester to Liverpool, Liverpool to Wigan North Western and Manchester to Preston via Bolton. This programme of electrification will result in faster journey times on these routes. The first stage, between Manchester and Earlestown, is due to be completed by December 2013, and the whole scheme should be finished by December 2016.
	In March 2011, the Chancellor announced the go-ahead for a major element of the northern hub package—the construction of the Ordsall Chord. This important stretch of new line will enable trains from Manchester airport to Leeds and the north-east to serve Manchester Victoria alongside trains from Liverpool, which will be diverted from their present route to operate via the more direct Chat Moss route. This will substantially reduce journey times between Manchester and Leeds and release capacity at Piccadilly station for additional services from the south and east of the city. All those measures should help to open up job opportunities in the way that my hon. Friend referred to and enable more people to take advantage of the economic vitality of Manchester.
	In his autumn statement the Chancellor announced that the route between Manchester, Leeds and York would be electrified. This announcement, coupled with the Ordsall Chord and a programme of other line speed improvements already funded, will cut journey times between Liverpool and Newcastle by up to 45 minutes. We believe that those improvements will deliver significant
	benefits across the north of England, particularly in the north-west, revitalising the Manchester economy to the benefit of the surrounding areas, including, of course, east Lancashire.
	As well as cutting journey times and reducing costs, the improvements that we have announced and our programme of electrification will release diesel trains for use elsewhere on the network, making expansion of services on other lines easier to deliver. We will be considering further improvements to our railways in the north of England and other elements of the northern hub package in the high level output specification, which we will be publishing in the summer, on improvements that can be funded by the Government between 2014 and 2019. In the meantime, Network Rail is undertaking further development work on each element of the package to establish with greater clarity how much they would cost and to gauge the strength of the business case.
	Our priority is to reduce the budget deficit, but we fully recognise the need to invest in improving our transport network, because of the regeneration and job opportunities that it can deliver. We are also pressing forward with a programme of reform on our railways so that we can reduce the cost of running them to give better value for money for taxpayers and fare payers, and also make it more realistic and viable to deliver the kind of improvements to services that hon. Members have called for tonight.
	Question put and agreed to.
	House adjourned.